Beruflich Dokumente
Kultur Dokumente
Amy L. Freedman
POLITICAL CHANGE AND CONSOLIDATION
© Amy L. Freedman, 2006.
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First published in 2006 by
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ISBN-13: 978–1–4039–6857–9
ISBN-10: 1–4039–6857–8
Library of Congress Cataloging-in-Publication Data
Freedman, Amy L.
Political change and consolidation : democracy’s rocky road in Thailand,
Indonesia, South Korea, and Malaysia / by Amy L. Freedman.
p. cm.
Includes bibliographical references and index.
ISBN 1–4039–6857–8 (alk. paper)
1. Democracy—Southeast Asia. 2. Democracy—Korea (South) I. Title.
JQ750.A91F74 2006
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This book is dedicated with love to Eric,
Alyssa, and Cameron Kopczynski
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Contents
List of Tables xi
List of Acronyms xiii
Preface xv
Introduction 1
Theoretical Issues: Democracy 2
Transitions to Democracy 4
Economic Crises and Political Change 5
Consolidation of Democracy 10
Case Studies 12
Conclusion 25
1 Thailand: Successful or
Incomplete Democracy? 29
Thai Political History 29
Principal Players in Thai Politics: The Military 33
Popular Protests and Civil Society 35
The 1997 Economic Crisis and the Ratification of
the New Constitution 36
Explaining Political Change 42
Internal Factors: Political Infighting, the Role of the
Military and the Civil Society 45
External Factors: Pressure from the IMF and Global Capital 46
Connection Between the Economic Crisis and Political Reform 47
Changes Under the 1997 Constitution 48
Status of Democracy Today? 49
Conclusion 58
viii ● Contents
Conclusion 129
Case Study Conclusions 130
Applicability of Case Studies to Theoretical Material 135
Final Thoughts 141
Notes 143
Bibliography 165
Index 177
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List of Tables
T
his project began with a summer research project on the
connections between economic crisis and political change. With
research assistance from Rachel Ellenport and later Stephen
Cochi and Vanessa Vincent, I became familiar with the theoretical
literature exploring the relationship between economic problems and
political consequences. We then dug further into the details of the popu-
lar and political reactions throughout Asia to the crisis. The puzzle of why
Malaysia’s leader Prime Minster Mahathir was able to hold on to power
seemed directly linked to his decision not to turn to the IMF for help.
But, clearly, the IMF was not itself the agent of change. So, my research
continued and I examined popular protests, elite politics, and relation-
ships between leaders in power and opposition forces. As the book details,
successful political reform is a result of a mixture of these factors.
Of all the countries discussed in the book, Indonesia has clearly
been transformed the most. Despite the continued challenges that the
country faces, I remain amazed by all the positive changes that have hap-
pened there over the last seven years. In the aftermath of Suharto’s
authoritarian New Order, mostly free and fair elections have been held,
the press is no longer muzzled, and a wide variety of civil society organi-
zations articulate and advocate a range of interests. Ultimately,
Indonesia, and to a lesser extent Thailand and South Korea, need to
wrestle with problems of corruption and the balance of power among
political institutions. These shortcomings are not unique to Asia or to
new democracies, but they are important elements of the democratiza-
tion process. It is vital in a democracy that people feel the political and
economic systems are fair and transparent. Of course, democracy is not
a fixed state, it is always changing and evolving. For Indonesia, South
Korea, and Thailand democratization is a process without a predeter-
mined end. Malaysian politics too is an open question. The groundwork
is certainly there and if a reform-minded leader or a set of elites comes to
xvi ● Preface
power in the future, I have no doubt but that Malaysian political reform
will occur quite rapidly. The promise and possibility of a more fair polit-
ical system and better economic conditions are what make Asia so inter-
esting to study.
I am in debt to a number of people for making this project possible.
First, I want to thank Franklin & Marshall College for its generous sup-
port. Through the Hackman scholars program the college provided
funding for research assistance during the summers, and the college gen-
erously granted me a research leave in order to write the manuscript.
I appreciate my colleagues’ encouragement and suggestions on my work
and for putting up with my absence during my junior research leave and
a subsequent sabbatical. Thanks are due to my friends and contacts in
Asia, as well as to conference panelists, discussants, and participants who
pointed out shortcomings and made suggestions for improvements.
I appreciate my editor Toby Wahl’s ideas and feedback on the work as
well as the cogent and constructive criticisms of the external reviewers.
As always, errors and omissions are entirely of my own doing.
Lastly, I want to thank my family—Kevin, Eric, Alyssa, and even
Cameron—they have sustained me with their love and confidence
throughout the project.
Introduction
I
n 1997 and 1998 Asia was hit by a severe economic crisis. Most
countries in the region (from South Korea through Southeast Asia)
were faced with massive currency fluctuations, banking crises, and
plummeting stock markets. These economic problems were compounded
by political turmoil. Given Asia’s experience of massive financial diffi-
culties coupled with political upheaval (specifically in Thailand, South
Korea, Indonesia, and Malaysia), this book begins with a broad question:
what is the relationship between economic crises and political reform or
democratization?
In 1997 Thailand and South Korea held democratic elections and
opposition parties came to power. In Indonesia, Suharto’s long period of
authoritarian rule came to a crashing close when riots and demonstra-
tions forced him to become more and more politically isolated and
finally compelled him to resign. In Malaysia, the ruling coalition was
able to maintain power but a new sense of political activism developed in
the wake of Prime Minister Mahathir’s firing of his popular deputy
Anwar Ibrahim. When parliamentary elections were held in Malaysia in
the fall of 1999 the ruling party faced two challenges: a new political
party was formed based on a desire for greater social justice, democracy,
and civil rights; more significantly the Islamic opposition party, PAS
(Partai Islam se Malaysia), won an unprecedented number of seats at the
state and national levels. This brings me to my next set of questions: how
can we explain the variation in political change in Asia as a result of the
economic crisis? In order to answer this more specific question, I have
looked at the conditions leading up to the political transformations and
at institutional differences such as elite coalitions and the party struc-
ture, the nature of political protests (from whom did calls for change
come, and were demonstrations peaceful?), and the conditions imposed
by the International Monetary Fund (IMF) to try and understand what
impact these had on political changes.
2 ● Political Change and Consolidation
transparent and the playing field more level. And, most importantly, the
state and its elected officials need to be committed to upholding the very
laws that they create and supposedly enforce. This is what I have in mind
when I talk about a system being “fair.”
Transitions to Democracy
Keeping these elements of democracy in mind, the next theoretical task
is to understand transitions to democracy. There is a vast body of scholarly
work on transitions to democracy. The literature that has the most rele-
vance to what I am doing here is a cluster of work that came out in the
late 1980s and early 1990s,3 as scholars offered explanations of the
recent wave of countries undergoing democracy. While terminology
often differs, as does methodology, there are some common elements in
much of this work. A transition to democracy could happen in one of
several ways, but in all of the ways elites within and outside of power are
seen as the most important actors. Democracy can evolve when a reform-
minded leader takes the reigns of power and marginalizes hard-liners in
power; it can come about because of a negotiated process between
reform-minded opposition leaders and allies in power, or when an old
order collapses and is replaced by democratically inclined newcomers.
This literature was a departure from earlier work on democratization,
which was sometimes referred to as “modernization theory.” Modernization
theory’s basic argument was that democracy happened from below when
citizens grouped themselves together with other like-minded citizens to
assert their interests on the state. Democracy, in other words, was the
product of the actions of civil society. Schmitter and Diamond4 theorize
the role of groups or associations in society as contributing to or articulating
the demands and interests of various sectors of the population. In such a
position civil society is poised to play a significant role in encouraging
greater accountability and democratization. In fact, Diamond outlines
the ten democratic functions of civil society:
7. monitoring elections;
8. disseminating information and aiding citizens;
9. supporting economic reform;
10. strengthening the democratic state.5
One particular question that has generated a great deal of scholarly literature
has been the autonomy of civil society from the state. 6 While this book
does not weigh in explicitly on this debate, I have assumed that in order
for civil society to have an impact on democratization it must be at least
somewhat free from state domination.
When scholars first envisioned transitions from authoritarian rule,
they looked at the processes that Europe and the United States went
through over two hundred years ago. What many argued was that economic
development would lead to the creation of a middle class. This middle
class would be more likely to form associations and groups to protect
and promote their interests. Eventually, these groups would play a larger
role in demanding accountability, protection of private economic inter-
ests, and responsiveness from the government. These demands would
evolve into greater political openness and ultimately into democracy. In
democratic states, interest articulation comes from a variety of sources
within society, but the preferences that are best able to be heard are those
coming from well-organized, well-funded, and well-connected groups;
civil society rather than just mass mobilization or participation. During
times of crisis, does civil society play an important role in demanding
accountability and change, or does the impetus for change come from
elsewhere? To answer this, I turn to the literature that deals more specifi-
cally with the relationship between economic crises and political change.
Consolidation of Democracy
In the flurry of scholarship that was produced in the happy aftermath of
the fall of communism, most of the focus was on the end of the author-
itarian order. It quickly became apparent that ending repressive rule was
not the same as creating a solid, enduring system that guaranteed free
and fair elections, protection of civil rights and civil liberties, an open
press, and some sort of checks and balances or a sharing of power among
political institutions in general.
Consolidation of democracy is generally taken to mean a system that
is unlikely to break down, that is, we can expect it “to last well into the
future.”21 This seems simple, but it poses significant problems of opera-
tionalization and measurement.22 In order to describe and even to try
and predict consolidation, scholars look at the institutional or structural
underpinnings of the regime, and/or the attitudes and behavior of key
actors. In simple terms, do leaders play by the rules of the game and not
see themselves as above the law; are they willing to lose elections and
abide by the results? Schedler found that scholars pronounce a democra-
tic regime to be consolidated when leaders behave democratically, when
major political actors acquire democratic attitudes, and when the socioe-
conomic and institutional foundations for democracy are in place.23
Linz and Stepan use as a working definition of a consolidated democracy
the following criteria:
these elements; Indonesia is still struggling with this; in South Korea leaders
seem more habituated to this, but corruption is still a huge problem.]
Linz and Stepan have also detailed five interacting elements that must
exist in order for such consolidation to take place. Conditions must exist
for civil society to play a role in politics, there must be relatively free and
valued political society, rule of law to protect freedoms, a state bureau-
cracy usable by the government, and an “economic society” (a way of
mediating or balancing between state and market).26
One can assess these conditions over time, and perhaps feel that
democracy might be secure in the future if there have been successful
elections and transfers of power to different leaders. However, as
investors in the stock market know, past performance may not be an
indication of future success. In fact, as the case studies will show, it is not
clear that all of these criteria have been met in the countries where suc-
cessful political reforms were triggered by the economic crisis. In offer-
ing an explanation about the variation in political transformations
connected to the economic meltdown in Asia in 1997, it is necessary to
look carefully at what was different about the way the crisis was handled
in South Korea, Indonesia, and Thailand and to compare that with what
happened in Malaysia.
This book demonstrates the following arguments: economic crisis
leads to democratization when a leader loses political allies. Variation in
this process is attributable to the following:
Case Studies
The book contains chapters on, Thailand, South Korea, Indonesia, and
Malaysia to gain a better understanding of the relationship between
economic crises and political change. For each country I look at the polit-
ical and economic climate at the time the financial crisis begins. Then I
examine the incumbent regime’s reaction to the economic crisis, and if
there is popular support or opposition to official government policy. The
chapters detail the IMF’s intervention (or lack thereof in Malaysia) efforts
and how these affected particular elites in power and public opinion
about the crisis. Overall, I try to explain the internal political dynamics as
they shift in confronting the economic crisis. Finally, the political
changes that occurred in all three countries will be explained, and the
book will examine and analyze what has happened politically since 1998.
Specifically, I try and analyze if political reforms have really taken root,
and if democracy has progressed, regressed, or stagnated and why.
Particular attention will be paid to changing levels of support for various
leaders (incumbents and challengers) and how the financial crisis
impacted the outcome of so much political uncertainty. Then each chap-
ter turns to the question of democratic consolidation and what the
achievements of and obstacles to greater democracy might be.
In order to understand what was happening in Southeast Asia in 1997,
I provide here a brief summery of the key events in the four countries exam-
ined, and how these events relate to my questions about democratization.
Indonesia
On July 8, 1997, Indonesia faced a currency crisis that badly devalued
the rupiah. Throughout the summer Indonesia tried to cope with the
Introduction ● 13
falling rupiah on its own. Suharto and his closest allies were unable to
decide if they wanted to accept the terms offered by the IMF for assis-
tance in stopping the economy’s free fall. Finally, in November 1997, in
an effort to calm domestic and international fears of inaction, Suharto’s
government closed sixteen insolvent banks and announced additional
austerity measures. Instead of increasing confidence in those financial
institutions that were sound, financial panic occurred and mass demon-
strations erupted across the archipelago. Although it was announced that
US$33 billion in loans would be made available to Indonesia, Suharto
was still unable to agree to terms of a bailout from the IMF. Finally, in
January 1998, Suharto agreed to a large rescue package and a set of
economic prescriptions from the IMF. Some of the requirements
included curbs on official favoritism for companies controlled by his
children and his closet allies, and reductions in subsidies.
In January 1998 Suharto announced that he would seek reelection
later that year. It would be his seventh term as president of Indonesia. He
also hinted that he would choose B.J. Habibie as his next vice president.28
Suharto’s actions only served to further weaken investor confidence
about reforms in Indonesia’s economy, and public disapproval over how
he was handling the economic crisis was growing alarmingly. Habibie
was viewed as a poor choice for vice president; he was best known for
advocating nationalist economic policies and being loyal to Suharto.
Mass demonstrations increased throughout Indonesia in early 1998 and
on February 14 they turned violent. Rioters in Jakarta, Medan, and other
cities burned and looted shops. Churches were vandalized and burnt.
Protests continued in major cities during February, although police
sometimes tried to break them up; at times police and military units
stood by while protestors destroyed private property and even attacked
other people, mostly ethnic Chinese. On March 10, 1998, Suharto was
reelected by the legislature and was given significant new power to con-
front the economic crisis. His reelection triggered some of the largest
and most fiery antigovernment demonstrations in thirty years. Adding to
the pile of criticism against Suharto, he appointed several controversial
figures to his new cabinet, including his eldest daughter and Bob
Hasan.29 It seemed that Suharto was more interested in surrounding
himself with allies than in selecting the best people for higher offices.
Protests continued into the spring.
May began with violent riots in Medan and other cities over price
increases resulting from reductions in government subsidies for cooking
oil and other necessities. Thousands of students continued protesting
against the regime. Some very notable and high-profile individuals
began calling for Suharto to step down. Muslim leader Abdurrahman
14 ● Political Change and Consolidation
Wahid called for Suharto’s resignation and he pled with the nation to put
an end to the hostility toward the Chinese community. Wahid’s outspo-
kenness against the government encouraged the students to continue
their protests and to take them outside the campus gates to the streets.30
On May 13, 1998, troops opened fire on thousands of student pro-
testors at Trisakti University. Six were killed and dozens wounded. The
next day protests turned horrifically violent. Hundreds of stores, vehicles,
offices, and homes were burned and looted.31 Most of the anger and
damage was directed at Indonesia’s ethnic Chinese minority because of
their perceived business ties with Suharto.32
On May 21, 1998, after thirty-plus years in office, Suharto resigned
as president of Indonesia. B.J. Habibie became president and announced
that he would stay in office only a year while the country planned for
new elections.
The most free and open elections since the 1950s were held on
June 7, 1999. Forty-eight parties competed for seats in parliament. The
parties that won the most seats in the legislature were: Megawati
Sukarnoputri’s PDI-P, the Indonesian Democratic Party in Struggle,
which captured 34 percent of the popular vote; Habibie’s Golkar Party,
which was still strong because of dense organizational networks estab-
lished under Suharto, received 20 percent of the vote; Abdurrahman
Wahid’s (aka Gus Dur) National Awakening Party (PKB) and Amien
Rais of the National Mandate Party (PAN) also received large number of
votes. The president was to be chosen by an electoral-college mechanism
in October of 1999. Despite winning the most seats in the legislature,
Megawati (daughter of Indonesia’s first president, Sukarno) refused to
network and build up a base of support among others in power. When
Habibie withdrew from contention at the last minute, Wahid was chosen
by the People’s Consultative Assembly to serve as president.33 Although
only in office for nineteen months before being impeached because of
his inability to address continuing corruption at the highest levels, eco-
nomic disorder, and separatist movements, Wahid’s presidency was seen
as a period of significant political reform. New laws were passed to
restructure political institutions and improve civil rights and liberties,
and a greater climate of openness took hold.
There were four interrelated factors that contributed to pushing
Suharto out of office in May 1998: the economic crisis, the protests and
riots, the miscalculations of the IMF, and the internal pressures from
other political elites. The nature of the economic crisis and the upheaval
that resulted from it are described earlier. But, what exactly did the IMF
recommend and what were the effects of these prescriptions?
Introduction ● 15
IMF Recommendations
On October 8, 1997, Indonesia formally turned to the IMF for aid with
managing the economic crisis. After much negotiation with Suharto, the
first IMF loan of US$43 billion was made on October 31. Indonesian
finance minister Mar’ie Muhammad and other technocrats in Suharto’s
cabinet, such as Sudrajdad and Widjoyo Nitisastro, also helped negotiate
the IMF package. The first loan was to last for three years and the
Indonesian government was to follow contractionary economic policies.
The government was supposed to reduce expenditures and close insol-
vent banks. The overarching goal behind these prescriptions was to
restore investor (and domestic) confidence. The program also attempted
to stabilize exchange conditions and oversee the restructuring of the
external current account. These recommendations were to lay the foun-
dation for the resumption of economic growth.34
In addition to the fiscal requirements of the IMF, the Indonesian
government was also mandated to further liberalize and deregulate its
market. For example, Indonesia was encouraged to remove many of the
country’s protective trade barriers over the three-year period of the loan.
The IMF sought to persuade the Indonesian government to dissolve
monopolies and allow for greater transparency in business decision
making.35 It actually got involved outside its normal parameters by creating
policy to dissolve the clove and plywood monopolies in Indonesia.36
None of these reforms was able to curb inflation, slow the further decrease
in the value of the rupiah, or halt skyrocketing unemployment.37 Instead,
the economy slowed even further. On January 15, 1998, Indonesia
negotiated a second IMF program. This loan called for the removal of
subsidies on food and energy.38 Instead of just reducing government
expenditures, the removal of subsidies further inflamed discontent and
contributed to escalating protests and violence.
On April 8, 1998, the IMF and the Indonesian government agreed on
a revised program, since Suharto had failed to fulfill the first and second
IMF accords. Again, the IMF pressed for greater liberalization of the
economy in exchange for the US$43 billion. To what extent did Suharto
abide by these prescriptions? For the most part, Suharto acted to protect
the wealth and power of his family and close friends. Food and fuel sub-
sidies were removed but monopolies and corruption continued. Examples
of Suharto’s inconsistencies included the closing of sixteen banks, as
per the IMF’s request in November 1997, and then letting them
reopen under new names. The 70 percent increase in petrol prices and
60 percent increase in electricity rates that were enacted were part of
what drove protestors to the streets.39 The pain was not shared equally in
16 ● Political Change and Consolidation
The other significant element of the protests was that they provided
opportunities for religious and secular activists to work together. “In
Yogyakarta, young Muslim women in headscarves have joined flower-
waving nuns at campus rallies.”41 Likewise, on May 1, representatives of
thirty workers’ groups in Greater Jakarta met with student leaders and
the next day several workers addressed the student rally. Student–worker
links were also made in Bandung and Surabaya.
The violence and the damage from the riots caused even some of
Suharto’s staunchest allies to start questioning his leadership. After
months of turmoil, on May 18, 1998, House Speaker Harmoko publicly
offered Suharto three options: he could reshuffle his cabinet, resign, or
face a special session of parliament in which he could be impeached.42
This was extraordinary criticism from an institution that had basically
served as Suharto’s rubber stamp for thirty years. The military still
seemed squarely behind the president at this point. On May 20 all fourteen
economic ministers resigned under pressure from Akbar Tanjung and
Ginandjar Kartasasmita (lead economic ministers).43 Suharto sent his
vice president to convince the ministers to rescind their resignations;
instead, Habibie asked them to give him their support. House Speaker
Harmoko threatened to go ahead with impeachment proceedings.
Finally, on May 20, the military signaled that it too had lost faith in
Suharto. General Wiranto met the president on May 20 and told him
that he could not guarantee security in Jakarta; although there were
seventeen thousand troops in the city, the general did not feel that they
would be able to keep the peace when faced with further demonstrations.
Although none of his close allies were able to directly tell Suharto to step
down, many well-respected Islamic figures had spoken publicly about
Introduction ● 17
replacing the president, and other leaders close to him hinted at their
shifting views. Suharto resigned on May 21, 1998, after thirty-two years
in office.44
There is no question that the demonstrations, sparked by the
economic crisis and the perception that the IMF’s conditions were
implemented in a way so as to protect Suharto’s allies while the rest of
the country was suffering, contributed to Suharto’s abandonment by his
closest advisors and ultimately by the military. However, it was not
simply that democratization evolved because of demands from below.
Only when Suharto lost internal elite support did he agree to step down,
paving the way for elections to be held a year after.
By the close of 1999 it seemed that Indonesia had made a giant step
toward democracy. However, there are a number of lingering (and difficult)
problems that will make further consolidation of democracy more
challenging. Although he assumed office with high praise from the inter-
national community, Gus Dur quickly became viewed as a messy,
ineffective leader. He fired cabinet ministers without consultation and
refused to account for his actions.45 Accused of corruption and incom-
petence, Wahid was removed from office in July 2001. Megawati
Sukarnoputri took over and ruled until she lost the September 2004
election. Although Megawati’s party, PDI-P, had the largest number of
seats in parliament and she was widely popular in some circles, her cabinet
continued to reward supporters and conservative forces over reform-
minded leaders. Increased separatist tensions and conflict over how
to react to militant Islamic groups made Megawati look weak and unable
to balance diverse and sometimes conflicting interests.46 In parliamen-
tary and then presidential elections held in 2004, Megawati’s PDI-P lost
seats in the legislature, and she lost the presidency to former general
Susilo Bambang Yudhoyono, a newcomer to electoral politics. Indonesia
has made enormous strides in implementing and consolidating democracy.
The institutions and mechanisms are now mostly in place for Indonesian
citizens to truly have a say in local and national government and policy
making. Where I question the fullness of democratic promise is in the
protection of rights and the willingness and ability of the regime to
address problems of corruption. Indonesia faces pressures from militant
or radical groups, some seeking independence from Indonesia, some
seeking to implement an Islamic state. In part because of these pressures,
the Indonesian military and police still have a great deal of (unofficial)
power. In a number of places (such as Papua, Aceh, and Ambon) atroci-
ties have been committed both by state forces and by militant groups. In
addition, the government has not acted forcefully enough to protect
18 ● Political Change and Consolidation
Thailand
Thailand had the dubious distinction of being the first domino to be hit
by the financial crisis. The currency crisis hit in July 1997 and called
into question years of economic growth and increasing prosperity. It
triggered large demonstrations and protests against Prime Minister
Chavalit’s government for being unable to cope with the problems and
for seeming incapable of making any decision to stop the free fall of the
economy. People rallied around proposed changes for a new constitution,
and, ultimately, opposition politicians, some within the dominant coali-
tion in power, plus key factions within the military and even the king
threw their weight behind the charter. Finally, Chavalit and entrenched
politicians were forced to adopt the new constitution that aimed at
reforming the political system, and at making corruption and vote buy-
ing less prevalent. Finally, late in 1997, Chavalit resigned, paving the
way for the opposition to come to power and to leave the field more
open for elections in the following year.
While the chapter on Thailand will show that the economic turmoil
was a prime catalyst for political change, it was not as simple as saying
that public outcry over the economic crisis forced conservative parlia-
mentarians into voting to accept the proposed constitution. While pub-
lic outcry did matter, what is vitally important is that elite political
leaders, the heads of the major parties, ministers, and military generals,
were renegotiating their alliances and ties both with one another and
with various groups in society that were pushing for change. Elite
resignation to political pressure and policy shifts among the top leaders
is what ultimately allowed for the passage of the constitution and for
Prime Minister Chavalit’s departure. The 1997 constitution was hailed
by reformers and analysts for attempting to bring significant political
reforms to a system that was partially democratic but had been corrupted
by vote buying, money politics, and well-entrenched political elites who
seemed less-than-responsive to people’s needs. Ultimately, I argue that
the consolidation of democracy was in reach in 1997 and in the aftermath
of the economic crisis, but under Thaksin democracy slipped further
from Thai citizens’ grasp. The explanation or the independent variables
for both the successful reforms of the political system in 1997 and the
Introduction ● 19
South Korea
In the fall of 1997 South Korea was in the midst of a hotly contested
presidential election. The then president Kim Young Sam was prevented
by term limits from running again; hence, the race was essentially
between longtime political dissident Kim Dae Jung and the GNP
(Grand National Party) candidate Lee Hoi Chang. Kim Dae Jung’s
victory in December was heralded as the first true democratic transfer of
power in South Korea and the economic crisis was credited for giving
people incentive to vote out the incumbent party.
As the Asian financial crisis hit one Southeast Asian nation after
another, South Korea seemed as if it would be immune to similar ills. An
article in the Christian Science Monitor describes how the students in
South Korea were less and less likely to mount large protests.47
There were fewer and fewer students joining political organizations on
campus, and the number of radical student activists had fallen signifi-
cantly. By 1997 Political apathy seemed more the norm than political
engagement.48
In the fall of 1997 Kim Young Sam and his party promised a reform
package to help clean up debt-ridden banks. Thousands of Central Bank
employees threatened to go on strike because the proposal would
strengthen the power of the Ministry of Finance (MOF) by giving them
supervisory authority over local banks.49 There did not seem to be a
larger public discussion about weaknesses in the economy and threats to
economic stability. Activism came largely from workers of Kia Motors
20 ● Political Change and Consolidation
political and economic reforms. To this end he did initiate several high
profile anticorruption campaigns and both former presidents Chun and
Roh were brought to trial and convicted for corruption (their sentences
were later commuted). However, throughout his administration, new
scandals arose about personal connections and favoritism. So, at the out-
set of the 1997 election people were disenchanted with Kim Young Sam’s
success. Party politics in South Korea are largely based on the personal-
ity and power of the party’s leader, as well as his regional affiliation.53
With Kim Young Sam’s reputation diminished even before the economic
crisis of October 1997, it was going to be a tight race in the presidential
contest.
In addition to Kim’s tarnished image, Lee Hoi Chang faced his own
scandals. Lee was hurt by accusations that his son had avoided military
service, and after a bruising primary Lee’s party challenger, Rhee In Je,
broke off from the GNP and ran again against him in the final election.
Even without competition from Kim Dae Jung, voters had many concerns
about Lee’s candidacy. As the election neared, all candidates promised to
uphold the agreement with the IMF. This was a somewhat surprising
move on Kim Dae Jung’s part. Kim’s core support had always come from
the left, from labor unions, and from his home region of Cholla.
Initially, Kim had criticized the IMF agreement and his remarks implied
that if he won election he would renegotiate the deal. This statement
caused dismay in the financial community both within South Korea and
internationally. Kim was forced to moderate his remarks and then he
chose to agree with the other candidates in a rare show of public agree-
ment among the contenders.54 One other significant move that Kim
made as the elections neared was that he announced a coalition with the
conservative politician Kim Jong Pil and his United Liberal Democrats
(ULD). Kim Dae Jung announced that he would appoint Kim Jong Pil
as prime minister if elected. This pulled some conservative voters away
from Lee Hoi Chang and the GNP. This political alliance and the
competition from several challengers may have decided the outcome:
Kim’s margin of victory against Lee Hoi Chang was miniscule (40.3 vs.
38.7 percent).55
Subsequent legislative elections in 2000 resulted in the ruling
Millennium Democratic Party (MDP; Kim Dae Jung’s renamed party)
failing to secure a majority; it won only 35.9 percent of the votes. Now
they were a ruling minority party and the GNP won 39 percent of
votes.56 Politics became a struggle between the ruling and opposition
parties without progress on institutionalizing political processes. Kim
faced accusations of corruption and influence peddling. In the run up to
22 ● Political Change and Consolidation
Malaysia
Like Indonesia and South Korea, Malaysia faced an economic crisis in
1997/98. However, instead of turning to the IMF for help, Malaysia
decided to address its financial difficulties without international assis-
tance. Mahathir’s regime in Malaysia, like Kim Young Sam’s, Chavalit’s,
and Suharto’s, faced large protest movements and internal dissent among
political elites. Mahathir alone of these four leaders was able to hang on
to power and in the fall of 1999 his party’s coalition again won a large
majority in parliament. He left office voluntarily in the fall of 2003,
turning power over to Abdullah Badawi. How might we explain the lack
of political change in Malaysia when so many of the independent vari-
ables there were similar to the conditions in Indonesia, Thailand, and
South Korea? I believe that it is because Mahathir was able to outma-
neuver more reform-minded leaders (both in the economic and political
senses) within the government. He was able to do this in part because the
IMF did not require Malaysia to make changes to its political economy.
Thus, there was no external incentive or backing for possible challengers
to Mahathir’s power, and UMNO’s leadership was able to protect economic
elites with close ties to the party.
Introduction ● 23
position. Popular protests did not translate into political change because
the opposition parties were highly diverse in their constituent appeals
and inconsistent in their messages and because Malaysian political insti-
tutions make it significantly cumbersome to unseat the current elites.
Likewise, Mahathir was able to avoid going to the IMF and so Malaysia
was not forced to restructure the close ties between business and political
elites. Finally, Malaysian Chinese supported the ruling coalition in
unprecedented numbers.
The economic crisis shed light on the undemocratic nature of
UMNO and the powerful ruling elite. For a brief period it seemed that
opposition politics might take off in Malaysia. However, by the end of
2001, Mahathir had consolidated power and reclaimed lost constituen-
cies. Anti-Islamic feelings helped BN win by-elections and infighting
among opposition parties (whose coalition was named the Barisan
Alternatif, BA), along with hostile government action against Keadilan
leaders who were members of PAS, contributed to the withering of a
forceful opposition to the ruling coalition.65 With levels of support
high, Mahathir announced he would retire at the end of October 2003.
His successor, Abdullah Ahmad Badawi, took over as prime minister on
October 31, 2003. “There is almost no chance that the BN, dominated
by the UMNO will lose power to the BA whenever the elections are
called.”66
Conclusion
As explained in the beginning of the introduction, there are several
reasons one can account for the different political outcomes in Asia
despite (roughly) similar economic woes in 1997/98. The case studies
highlight the importance of political relations at the highest levels of
power. Those leaders who were able to link support from some key
element of society to the country’s economic predicament were best able
to win or hold power. Hence, Kim Dae Jung endorsed the IMF’s plan
and made an alliance with the more conservative Kim Jong Pil. In this
manner he did not alienate too large a section of the middle and business
classes. Because of historical ties to labor activists and support for more
left-wing causes, he appealed to a wide variety of voters. Since the elections
were already scheduled and since South Korea already had fairly open
and free elections, it was easier for a political opponent such as Kim Dae
Jung to challenge the incumbent government. Thailand too already had
the infrastructure for greater democratization to happen peacefully. An
institutional mechanism existed to adopt a new charter and to hold new
elections when the prime minister finally stepped down.
26 ● Political Change and Consolidation
out over “hawkish” ones. And, these candidates have also been the ones
campaigning for greater political reform and openness. This confluence
of factors does not seem present either in Malaysia or in Indonesia.
Security threats or potential ones seem more likely to provide justification
for increasing the power of the ruling elites and/or internal security
forces perhaps at the expense of greater democracy.
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CHAPTER 1
Thailand: Successful or
Incomplete Democracy?
suspect during this period. Thailand also formed a close alliance with the
United States. The elections in 1957 were a brief experiment with
democracy. After the elections, students took to the streets and protested
heavy-handed government tactics such as ballot box stuffing. Sarit too
was critical of the Phibun and Phao factions of the government. Phibun
declared a state of emergency and scrapped democracy. In March of
1957 Sarit, head of the military, carried out a coup, suspended the
constitution, and dissolved parliament. The king backed his actions.
Although a civilian government was briefly put in power, Sarit took
control of the government in 1958 and instituted a military dictatorship.
From its relationship with the United States, Thailand received
money, weapons, and even had U.S. troops stationed there. Although
Sarit died in 1963, his policies and regime structure continued through
the 1960s. In November 1971 Prime Minster Thanom carried out a
coup against his own government, ending a short experiment with
parliamentary democracy. Military rule again prevailed. In response to
Thanom’s proposal for a fully appointed legislative assembly, students
and workers took to the streets. On October 13, 1971, more than two
hundred and fifty thousand people rallied in Bangkok; it was the biggest
demonstration in Thai history. The next day troops fired on the protes-
tors and killed seventy-five people. They also took over Thammasat
University. King Bhumibol stepped in to the quell the violence and
convinced Thanom to retain control of the armed forces but to turn over
the prime ministership to a civilian, Sanya Dharmasakti. Later Thanom
and his close allies fled the country.
Although there was a return to civilian control and new elections were
held, a significant number of politicians were right-wingers and they
seemed more inclined toward status quo than toward meaningful
reform. Through the 1970s, the government acted violently against
communist insurgents and against any progressive leftist groups. Tension
and violence mounted and in August 1975 police (on strike to show the
government their displeasure at perceived weakness toward student
activism) went on a murderous tirade at Thammasat University.
Increasing the power and the coerciveness of the police and the military,
several ultranationalist (quasi-military) groups were formed to harass
leftist and social activist groups both within Bangkok and in the coun-
tryside. The brutal confrontation between leftist and rightist groups
reached an apex in October 1976. Police again lay siege to Thammasat
University where two thousand students were holding a sit-in. The next
day’s assault on the campus resulted in hundreds of students being killed
or wounded and more than one thousand being arrested. That night the
32 ● Political Change and Consolidation
were shot by the army as the generals tried to cling to power. The killing
of scores of democracy activists became known as “Black May.”5 Many of
the leaders of the 1991/92 protests became the founders of a strong,
multifaceted nongovernmental organization (NGO) sector6 in Thailand,
which exists even today.
police force (which was used against internal enemies far more than
against external ones). However, it did not take long for a political
rivalry to develop between the police and the army. On September 14,
1957, General Sarit’s army surrounded police headquarters and Phibun
and his closest allies were forced to flee the country. The army thus
became the most powerful institution in the country.8
General Sarit ruled until he died in 1963 and leadership was passed
on to his military subordinates. Sarit focused on economic development
and cozy relations developed between the military and business leaders.
As social protests increased in the 1970s the alliance between business
and military interests weakened. A communist insurgency gained
ground and preoccupied the military’s attention. In 1975/76 there was
increasing political activism. New political parties formed, and student
and peasant activism was on the rise. As the political debate moved left-
ward the military became concerned about its power and more assertive
of its conservative views. Politics was increasingly polarized. On October 6,
1976, a coalition of conservative forces gathered outside Thammasat
University and then attacked. One hundred students were killed and
thirteen hundred arrested. The army then carried out a coup and helped
bring to power a rightist military regime. Many of those who had some
association with a progressive or leftist cause were forced into the hills.9
Firmly in power again, the military suffered factionalism and jockeying
for control. Over time, its power diminished. More political parties
formed, but they lacked strong institutional or ideological roots. By the
end of the Cold War military spending had shrunk. In the 1988 general
elections General Prem was forced to step aside and the Chart Thai Party
formed a new government. Chatichai was chosen as prime minister.
While Chatichai tried to assert his own power, he was forced to placate
and work with General Chavalit, the head of the military. By 1991
General Chavalit was pushed aside by a different faction of the army, a
group called “Class 5,” who were more conservative and royalist.
Thailand’s transition to democratic rule in the late 1980s was highly
ambiguous. The military remained quite powerful even while there was
an expansion of electoral politics. The military exercised its influence
both through legally prescribed means, such as its seats in the assembly
and the appointed senate, and through extra-constitutional methods,
such as the coup attempt in 1991. Even though Thailand (by the end of
the 1980s) had few legal barriers to the formation of interest groups or
political parties, the continued political power of the military reduced
the level of democracy and the influence of elected representatives in
parliament.
Thailand ● 35
There is a great deal of political science literature that tries to make sense
of processes of democratization. Some of these works find that popular
protests or demands from below are the primary independent variable in
bringing about democracy. For example, Ji Giles Ungpakorn in his article
on political reform in Thailand finds that Thailand’s democracy was
measurably impacted by mass protests and activism. He argues “(t)he
political freedom now exercised by Thai citizens is a direct result of the
continuous mass struggle against dictatorship.”10 Ungpakorn goes on to
discuss the nature of different forms of mass participation. Demands for
political change have come from various actors in Thailand. There are
active and influential NGOs and increasingly vocal groups of people
who stage protests and try to affect politics. Modern popular activism
dates to the revolution of 1932. While elite bureaucrats were at the fore-
front of demands for reforming the monarchy, there was also widespread
social discontent and peasants in the countryside became increasingly
critical of the regime as well. The October 1973 protests against the mil-
itary dictatorship continued this initial public outcry from the 1930s, as
students and thousands of workers rose against the ruling elite. Popular
protests become polarized between forces on the right and on the left.
On the left the Communist Party of Thailand worked with worker and
student organizations. Since this was the height of the Cold War, and
because the United States’ war in Vietnam had just ended, there was an
intense and vigorous reaction to politicization of the left. Several quasi-
militaristic organizations were created: the “Village Scouts” were group-
ings of middle-income peasants and rural small business people under
the leadership of the monarch. “Middle ranking government officials,
priests and intellectuals were urged to join a similar force known as the
‘Nawapon’ and unemployed and discontented technical college students
were organized into the ‘Red Gaurs.’ ”11 Leftist leaders were persecuted
and assassinated. The violence reached an apex on October 6, 1976,
when unarmed students and workers were shot and others brutalized at
Thammasat University. Later in the day, a military coup installed a
right-wing regime to power. Through the rest of the 1970s and 1980s
mass activism was stifled and economic growth was the highest priority.
While groups in society were less active during the late 1970s and in
the 1980s, it did not mean that consensus was easily reached. Within the
military and highest offices of power, there was disagreement about the
direction that Thai politics should take. By the late 1980s parliamentary
democracy was restored as more liberal military officers came to power.
36 ● Political Change and Consolidation
Leftist NGO leaders from the 1960s and 1970s had returned to Bangkok
and were increasingly at the forefront of a new effort at civil participation.
They created organizations to impact the political arena and to assert
their interests. Business elites also became more demanding of the
political system.
The cumulative effect of Thailand’s recent political history is that
civil society certainly exists and can have a significant impact on the
political sphere. This is particularly true when other key factors
are working toward the same aim. The military is very powerful and
well-connected to business and political elites. Members of the military
have acquired executive positions on boards of directors of major Thai
companies. Thai business executives have also become more politically
active as they use their wealth to contribute to political campaigns and
more frequently now to run for office themselves. Hence, business, mil-
itary, and political elites have increased their political power through
these economic relations.12 The king too is a center of power; although
he only uses his preeminent position occasionally, he is a potent and
forceful actor once his preferences are made clear. Most notably, King
Bhumipol intervened in the 1981 coup and in the 1992 violence. In the
latter case, the king met with General Suchinda Kraprayoon and the
Bangkok governor, the two major antagonists during Black May. He per-
suaded General Suchinda to step down and chose the well-respected
Anand Panyarachun to serve as prime minister. This defused the crisis
and returned the country to a semblance of democracy.13 As will be
discussed shortly, the king also expressed support for the 1997 constitu-
tion, which made opposition to it in parliament a far less likely option.
The last important legacy of Thai history is that external factors are
important forces in shaping the internal dynamics of the country. The
threat of communism during the Cold War had a significant effect on
internal politics, as did relations with the United States during that
period.14 Likewise, Thailand’s relationship with international investors
and the IMF shaped the nature of political reforms in 1997 and after.
The effects of the pressure from the IMF and global capital will be
discussed in forthcoming sections of this chapter.
More than two months after being promised a $17 billion credit line by
the International Monetary Fund—Thailand has barely begun to formulate
the economic restructuring that is required for the recovery program . . .
So far the Government has raised the sales tax and made plans for spend-
ing cuts that will halt a number of projects like highways and rail lines
that are essential to further growth. But when it took the difficult step of
raising fuel taxes last week to meet a budget target demanded by the IMF,
it quickly rescinded it in the face of public resistance . . . The political
uncertainty has itself become one of Thailand’s foremost economic prob-
lems as investor confidence slips lower and foreign lenders close off their
credit lines.20
Thailand ● 39
Political Chaos
The economic crisis coincided with the final stages of the drafting of a
new Thai constitution that hoped to reform the political system to end
(or at least weaken the effects of ) vote buying, corruption, and intense
patronage networks. In the wake of the events of Bloody May 1992,
demands for political reforms did not end with the return to electoral
democracy. A substantive process of political reform began shortly after
1992 with Amon Chanthrasombun’s study on reforming Thai universities
and the bureaucracy. Amon published newspaper essays and pamphlets
on political reform and his work was widely circulated when his ideas
were published as Constitutionalism: The Way Out for Thailand. From his
position as a public intellectual at the Institute for Public Policy Studies
(IPPS), Amon laid out what would become the foundation of a new
framework for political institutions and power structures in Thailand.21
Parliament seemed incapable of leading the way in making changes to
the political system and so much of the initiative for reform came from
civil society. NGOs such as IPPS and committees such as the Democracy
Development Committee (DDC) played a lead role in crafting a pro-
posal for a new constitution.22 Support for political reform in 1994 came
from elites and from NGOs and leading intellectuals and they pushed
for Prime Minster Chuan to take up the proposed ideas. Chuan’s
government fell in 1995 because of a corruption scandal over land deals
and the Chart Thai Party got to form the next government. Prime
Minister Banharn’s government announced support for the DDC report
but his government fell in November 1996 because of corruption and
incompetence.23 A decision was made to create a Constitutional Drafting
Assembly (CDA) comprised of bureaucrats, professionals (academics and
others), former politicians, and NGO leaders. A huge lobbying effort took
place to push particular candidates for the CDA. There seemed to be
massive public support for political reform. Retired general Chavalit
40 ● Political Change and Consolidation
One leading CDA member, who did not want to be named, believes
parliament will endorse the new charter. “I think that Chavalit is clever
enough not to create more difficulties for himself because of the economic
problem,” he says. “If Chavalit and his New Aspiration Party refuse to
accept it, it might make the public angry, and businessmen in particular
might come out with others to oust Chavalit. There might be a crisis.”25
Still, heading into the vote in September, it was not at all clear that the
parliament would pass the charter and avoid the chaos of a national poll.
The opposition party, the Democrats, said that it would vote for the new
constitution despite some reservations. Many in the ruling coalition still
opposed it. Public support for change was mounting and politicians were
beginning to feel that they had little choice but to vote in favor of the
new charter. On August 18 two thousand people rallied in Bangkok to
support the draft and King Bhumibol Adulyadej fully favored its pas-
sage.26 While it seemed logical for the ruling coalition to support the
new charter or face being voted out by an angry public, in fact there was
a great deal of contention over what course of action to take.
In general the middle class supported political reform and the
Democratic Party, the opposition in parliament signaled its intended
support. However, conservative forces were not out of the picture in
Thailand ● 41
at all clear what would happen next. Chavalit’s coalition partners were
left scrambling to decide if they should stay together and try to pick a
new leader, or if they should defect and form a coalition with the next
largest party in parliament, the Democratic Party. Parliamentary
convention was that when a prime minister resigned, the second-largest
party (in this scenario the opposition Democratic Party) got a chance to
form a government. The new constitution allows for a nonelected
premier to govern until new elections can be called and the new charter
can be fully implemented. However, the idea of a nonelected premier
seemed to go against the ethos of the new charter. Finally, the issue was
decided when members of Chavalit’s government defected to the
Democratic Party and they were able to form a seven-party coalition and
take power. Chuan Leekpai became Thailand’s new prime minister in the
third week of November 1997.33
brief summary of the basic arguments about how and why transitions
occur. Huntington, Przeworski, Share and Mainwaring, and O’Donnell
and Schmitter34 all find that transitions occur in (roughly) one of the
three following ways:
fluid condition, then a little more openness, or a little less openness (or
accountability), may not be frightening or threatening to a majority of
Thai citizens. So, how might one explain successful political reform in
1997 and afterward, and also the stagnation of those reforms?
There are several explanations for the successful passage of the
constitution and the tangible political reform efforts of the mid-1990s.
I group the factors into internal and external elements. Internal factors
include political infighting/elite realignment, the military, and civil
society/popular protests. External pressure for political reform came
from the IMF and the demands of the international marketplace.
then pushing for Chavalit’s ouster, by themselves these protests were not
the deciding factor. Right up until the week of the vote in parliament,
Chavalit had held back from giving a definite statement about his posi-
tion on the charter and through the fall he had ignored public outcry to
step aside. Chavalit had once been called the “great compromiser” by the
press.40 When he was no longer able to make policy effectively or to
command support from key players, it was time for him to go. Pressure
from within his own tight circle of supporters (military, party, and business
leaders) seems to have convinced him that he no longer had enough
credibility and clout to lead. “Even his closest fund-raisers told him to
resign.”41
As described earlier during the discussion on the political chaos that
accompanied the financial crisis, there was significant pressure from civil
society and from segments of the population at large. Like the literature
on political transitions describes, there were demands from opposition
leaders outside of power and (less often discussed by transition scholars)
from the masses. Business groups in Bangkok held rallies in support of
the passage of the new constitution, and thousands of people demon-
strated in the streets of the capital during August and September to force
the government to take notice of their discontent. While my assessment
is that ultimately the deciding factors in the passing of the political
reform measure were internal and elite-driven, there is no doubt that
politicians were impacted by the vocal actions of NGOs and the larger
society. This may have been especially true of the opposition Democratic
Party. Despite being a conservative party and having reservations about
what the new constitution would do to party members’ power and inter-
ests, Democratic leaders made it clear that they would vote in favor of its
passage. This showed that they clearly saw the tide of public opinion in
favor of the constitution and felt that supporting it could swing support
in their favor.
An IMF loan comes with a high political price for the government which
is required to surrender sovereign control over the country’s economic
policies and comply with austerity measures, such as raising taxes cutting
spending and removing subsidies.42
As the baht slithered downwards in the opening hours of the debate [over
passage of the new charter], even conservative politicians were forced to
48 ● Political Change and Consolidation
reckon with economic realities. “There are some clauses I don’t like, but
because of the economy we have to accept it,” says Pongpol Adireksarn, a
leading member of the opposition Chart Thai Party.44
showed that it was still a vital player in Thai politics when it (indirectly)
intervened to get Prime Minister Chavalit and reluctant members of
parliament to agree to the passage of the 1997 constitution. Since the
1930s the military has been one of the major institutions in Thai politics
and thus it is no surprise that it has both been an obstacle and a pro-
moter of democratization. There is no question but that the military’s
involvement in the 1991 coup and the attempts shortly thereafter to
handpick political leaders were a distinctly undemocratic action and
these actions resulted in a major loss of legitimacy. Whereas previously
people saw the military as an important enforcer of stability and a
promoter of economic growth, after 1991/92 a larger number of people
began to question its role in politics at any level.
Not only has the military been a national security force and a political
actor, it also has a number of business interests that make it a significant
part of the Thai economy. It owns media outlets that provide it power to
impact public opinion on a variety of different subjects. The military
controls the Thai Military Bank (TMB) and had used it for financing
procurement of weapons and for forging alliances with a number of busi-
ness heads seeking financing for economic development projects. While
the TMB initially escaped controls imposed after the economic crisis in
1997, it was later forced to allow increased investment and control from
foreign and nonmilitary sources. Holdings of the military and its allies
in the bank shrank from 43 to 25 percent.52
Since the 1991/92 coup people have also questioned the military’s
ownership of 221 radio stations and 2 television channels. There have
been legitimate questions asked about the risk this poses for democrati-
zation. Demands increased after 1992 for liberalization of the media (the
military regime had attempted to suppress news about military shootings
during the coup).
In the period after the 1997 crisis the Democratic Party and Prime
Minster Chuan Leekpai worked hard to dampen the control the military
once had over politics and to give it new sources of prestige. The prime
minister took over the post of defense minister himself instead of
appointing a retired general, and he appointed an ally, General Surayudh
Thailand ● 51
2000 4.76
2001 2.14
2002 5.41
2003 6.74
Even before his election victory, staffers at the ITV television network, in
which Thaksin’s family business was then acquiring a controlling interest,
publicly complained that they were being pressured to slant the news in
favor of Thaksin’s party. They were subsequently sacked, a move later
ruled illegal by Thailand’s Labor Court.64
that were critical of the new regime off the air. Advertising from the
government and from Thaksin’s related businesses was allegedly withheld
from critical media outlets. In 2003 Transport Minister Suriya
Jungrungreangkit’s family (close Thaksin allies) purchased the largest
stake in the corporation that owns The Nation.65 Print media, newspapers,
and the like are privately owned and a myriad of viewpoints can be
found both in Thai language papers and in English papers. Several
papers were frequently critical of the regime. However, there were charges
that independent views were not appreciated by the ruling powers. In
February of 2004 the editor of the Bangkok Post was shifted out of his post.
Critics of Thaksin charge that his allies forced Veera Prateepchaikul’s
departure from the news desk. “ ‘I would describe the Thai media at the
moment as being in an intensive care unit,’ said Kavi Chongkittavorn,
and editor of The Nation, the Post’s main rival.”66
Like not so democratically minded leaders before him, Thaksin has
promoted relatives to senior positions in the army and in the police. Two
former members of his staff now sit on the constitutional court.67
Despite the encroachment on freedoms, as of the summer of 2005
Thaksin and TRT’s popularity was at an all-time high.68 The opposition
Democratic Party did not try to counter some of the more aggressive
actions by the government and they seemed at a loss for how to gain back
a more significant showing of support.
In January 2006 mass protests against Thaksin began. His family
made a tax-free profit of about US$1.9 billion in the sale of their business
Shin Corp. to a Singapore state firm. Protests continued throughout the
winter. In April Thaksin called for a snap election. The three lead oppo-
sition parties boycotted Thaksin’s attempt to shore up his power.
Although TRT won, the election was ruled constitutionally invalid
because not enough seats of the lower house of parliament were filled.
Thaksin is serving as a caretaker Prime Minister (he remains the head of
TRT) and new elections will be held in October 2006.69
The events of the winter and spring 2006 illustrate conflicting things
about the state of democracy. Protestors in Bangkok and opposition
party elites decided to achieve their aims outside the process of electoral
politics. Thaksin thought he could use his support from rural voters
(where he has high support because of his social welfare programs) to
silence his critics with a quick election. He figured a win at the polls
would bolster his legitimacy. Instead, the hasty election further under-
mined it and he has been forced to promise not to run in the upcoming
election. This episode shows that there is not full confidence from people
or political elites that the system, such as electoral institutions or
institutional checks and balances can protect or assert their interests.
Thailand ● 55
Internal Pressures
One goal of the constitutional reform was to make the political system
more stable, certainly a laudable goal in a country where one could
hardly keep track of the governments since they changed so frequently
and where decisive policy action was nearly impossible. Improving
stability came through the consolidation of power within a smaller
number of political parties, and disallowing politicians from switching
parties at will. However, enhancing stability also made it harder to
unseat a government. Both the election commission and the NCCC
have tried to do the jobs that they intended, but they too have been
accused of being overly friendly toward particular political elites and of
being subjective in who they chose to investigate and which elections
they invalidate. Selecting members of these commissions and judges for
the Constitutional Court has become partisan and political.
Violence in the south of Thailand became a threat to Thaksin’s
government and its image at home and abroad. There are about six million
Malay Muslims in Thailand, out of a population of sixty-six million, and
they live mostly in the southern provinces of Yala, Narathiwat, and
Pattani. A separatist movement petered out there until the late 1980s,
but since then the region has been disturbed by sporadic violence perpe-
trated by a small number of remaining hard-line separatists allied with
those involved in illegal businesses such as the drug trade. In January of
2004 violence flared when separatists burned down twenty schools and
stole three hundred weapons from government armories; four soldiers
were killed in the conflict and the government began a violent crack-
down against Muslim suspects.70 On April 28, 2004, a coordinated
attack was carried out against police stations and temples across southern
56 ● Political Change and Consolidation
Thailand. The government’s response was swift and deadly. The Thai
military, under Defense Minister Chettha Thanajaro, ordered two bat-
talions of soldiers, about one thousand in number, to southern provinces
to quell the attack. Over one hundred attackers were killed along with
five soldiers and policemen. In the process of hunting down suspected
militants, Thai troops stormed a historic mosque in Pattani and killed
the thirty young men taking refuge inside.71 Local residents have
expressed outrage and anger at the killings, which have continued. While
Thaksin has said that the violence was instigated by Muslim separatists,
possibly with the help of Muslim extremists from elsewhere (possibly
members of Jemaah Islamiyah, JI, from Indonesia), it is not at all clear
that this is the full truth. Southern Thailand is rife with political rivalries,
criminal gangs, drug barons, and long-standing conflicts between the
military and the police.72 There is no evidence that local groups have
made connections with JI or other regional Islamic militant organizations.
It seems most likely that problems stem from resentment against Bangkok
for neglect and repression. The government’s extreme response made res-
idents and human rights groups critical, yet again, of Thaksin’s regime.
After achieving political reform in 1997, many activist groups seemed
to have lost their coherence and their motivation for vocal action.
During the economic crisis people and NGOs were mobilized as opposi-
tional forces to the government. Then from 1998 to 2006 it seemed that
civil society organizations had become more of a regular part of the
political process, working with, or lobbying through, institutional
channels to achieve their particular interests. While NGOs are not
agents of the state, and are certainly independent actors, in some ways by
becoming part of the regular contest over policy, they seemed to have
lost some of their edge and power as a force of opposition. However, the
protests in 2006, led by the People’s Alliance for Democracy (PAD)
showed that citizens can be mobilized against money politics and that
perhaps political consciousness has changed for some Thais.73 Civil society
and NGOs are highly diverse. The economic crisis provided an opportu-
nity for groups to come together in opposition to the government;
however, there is no unifying problem to solve today. So, environmental
groups, women’s organizations, media watch dogs, and so on, all work to
further their own goals and interests and have lost some of the power
that comes with joining forces for a common goal.74
Conclusion
Democracy has not been fully consolidated in Thailand. According to
measures of democratic consolidation such as leaders playing by the rules
of the game and not seeing themselves as above the law, and respect for
civil rights, there are several troubling signs for Thailand. First, Prime
Minster Thaksin did not exactly want to “play by the rules of the game.”
He was brought up on corruption charges and was able to avoid punish-
ment for what the commission found were violations. He seemingly
tried to manipulate media outlets critical of his regime. He used draconian
tactics to implement security policies against Muslims in the south, and
against those involved in the illegal drug trade.
In 1997 Thais seemed to overwhelmingly want greater democracy
and accountability. The desire for democracy and democratic attitudes
that have developed over time in Thailand seem to be overshadowed by
desires to improve economic growth and quality of life issues (even if
Thailand ● 59
this means an erosion of civil rights for some citizens). Hence, maybe,
one of the explanations for the weakness of democracy has to do with
people’s political values. Do Thai citizens value democracy? The answers
are mixed. In one of the few studies of Thai attitudes about democracy,
Albritton and Bureekul found overwhelming support for democracy. In
2001, 54.7 percent of those surveyed were fairly satisfied with the state
of Thai democracy; moreover, 34 percent were very satisfied with
democracy. Of the respondents 83 percent said that democracy was
always preferable. On the surface Thais are highly supportive of the
“idea” of democracy. However, the survey also found that democracy has
less support among elites, especially Bangkok elites, than among rural
majorities. Also, these two groups seem to understand democracy differ-
ently. When democracy includes a high degree of political conflict, there
seems to be a preference for curbs on freedom of expression if social
order is jeopardized. Trust in political parties is low and the 2005 election
clearly shows that personality matters a great deal. Although higher
numbers of rural voters profess to care about democracy, these voters
seem to view candidates favorably when they bring tangible benefits to
the district. Hence Thaksin’s rural support in 2006. Political ideas,
platforms, and larger policy matters are secondary to personal gain to be
had from elected officials. In addition,
pushed for the new constitution, the king, and activists who helped
mobilize groups to protest and agitate for the passage of the document.
External pressure came from the IMF and international investors who
wanted to see Thailand stabilize its economy. It became clear that the
economic problems were bogged down in the political chaos of the time
and so until the politics of the moment were resolved, the economy
would not stabilize. Again, the factors that tip the scales toward liberal-
ization or democratization are pressures from reform-minded politicians
and military generals, mass protests in Bangkok, and pressure from the
IMF. In many ways this is a strange confluence of variables that produces
positive political change. The same coincidence of interests no longer
exists.
Today, forces for political reform are mixed. Thaksin was far from
being a beacon of liberal democratic values, his party TRT has a lock on
political power, he has weakened key tools of democracy such as the
press and opposition parties. Civil society groups are divided, some are
focused on social welfare issues, others have chosen to assert interests
outside of electoral institutions. It is unclear if they will be able to work
to achieve larger political changes. International pressure from the
United States and from international investors is more focused on secu-
rity concerns and/or economic stability than on political liberalization.
To this end, Thaksin enjoys rural support at home and from abroad, thus
giving him little reason to implement greater measures of openness and
accountability. The world would certainly rather not see a repeat of the
1997 economic meltdown, however, it did provide a unique set of
circumstances for various groups to see common interest in advancing
political reforms. The situation is not as clear today.
CHAPTER 2
I
n the summer of 1997, as the economic crisis was tearing through
countries in Southeast Asia, South Korea seemed to think that it would be
spared the contagion. Throughout 1997 there were concerns over the
banking sector and over some of the large Korean conglomerates, chaebol,
which had become too large, too diverse, and highly leveraged. Giant
firms such as Kia Motors and Hanbo were struggling. By summer many
foreign banks had stopped or limited their lending to Korean firms, but
analysts seemed to think that South Korea would avoid a meltdown.1 As
the presidential election heated up in the summer and fall of 1997, the
candidates were not talking about the economy and there was no sense
of a looming crisis. Nonetheless, by November 1997, South Korea was
the latest country to fall prey to massive financial upheaval and political
turmoil. What impact did the crisis have on South Korean politics? Of
the countries studied here, Korea in 1997 was arguably the most
democratic and was certainly the most developed economically. Yet, the
economic crisis served as a catalyst for political reform in South Korea,
just like in Thailand and Indonesia. Kim Dae Jung (DJ), longtime
democracy advocate and opposition politician, won the 1997 presidential
election, ending the domination of Korean politics by the more conser-
vative and status-quo party (called the New Korea Party in 1997). What
about the crisis triggers similar political reforms in Korea as elsewhere,
and were these changes significant and long-lasting? In other words, did
the political changes that came about in the wake of the financial crisis
really change the political system and what are the prospects for further
change (if necessary) in the future? To answer these questions, this chapter
begins with a brief overview of South Korean politics, then looks at the
1997 crisis and the political changes that follow. Lastly, the chapter
62 ● Political Change and Consolidation
examines explanations for the successful political reforms and what has
happened since 1997.
Although Chun and Roh were military men, more in the tradition of
General Park than believing in the absolute good of democracy, they
allowed reforms to go through and for elections to take place. Roh was a
product of the military. He had been a colleague of Chun’s, and had
initially been handpicked by him to take over leadership of Korea.
Instead, Roh participated in the first relatively free presidential elections
on December 16, 1987. He ended up winning the election mostly
because Kim Young Sam and DJ split the opposition vote.
Roh took office as president, but opposition parties ended up
controlling the legislature. To try to overcome this divided government,
South Korea ● 65
reform the chaebol for two reasons. First, they provided so many jobs
that it was inconceivable to think of allowing any of the big firms to
actually go bankrupt. The chaebol were de facto welfare providers of jobs
and lifetime security.
Secondly, elected officials were highly reluctant to try and regulate or get
tough on the chaebol because they were such a significant source of
financial support for politicians.13
In 1997 there were plenty of reasons to be concerned about the gen-
eral health of the Korean economy. Nonperforming loans to Kia and
Hanbo, two of the largest firms in Korea, caused enormous problems for
South Korean banks such as the Korea First Bank. As mentioned, some
foreign banks had stopped or put limits on lending to South Korean
banks or firms. Short-term interest rates for loans were quite high
because of the risk of nonpayment.14 What dominated the news in South
Korea in the summer and fall of 1997 was the upcoming presidential
election. Because presidents can only serve one term, Kim Young Sam
was not running. His government was badly hurt by charges of misman-
agement of the economy and political scandals of corruption or nepotism,
issues that tarnished his party’s candidate, Lee Hoi Cheng.
As the election cycle heated up, it looked like a three-way race
between DJ (running from the National Congress for New Politics
[NCNP]), Lee Hoi Cheng from the ruling New Korea Party (NKP), and
Rhee In Je, who split off from the NKP. Kim had run in each election
since 1971 and had always lost. In August Kim was leading all public
opinion polls by a large margin. A victory for him would symbolize a
repudiation of the long history of military leaders controlling the politi-
cal apparatus.15 By fall the economy was looking even more shaky, but
none of the candidates was talking about it. Kim made an alliance with
his conservative rival Kim Jong Pil from the United Liberal Democrats
(ULD). He did so to keep Kim from running and splitting the vote
(which gave Roh the victory in 1987) and also to reach out to a wider
support base than his traditional backers in labor and leftist groups
could give him.
South Korea ● 67
On November 10, 1997, the Korean won closed at 999 to the U.S.
dollar. From January 1997 to November 1997, the won had lost 18 percent
of its value. Given what countries in Southeast Asia had been through,
the use of Korea’s foreign reserves to try and stabilize the currency would
be dangerous, and Korea had low levels of reserves anyway. South Korean
firms and banks had over US$110 billion in foreign debt that would
now become impossible to pay off. While there was no domestic panic in
November, currency speculators began selling their holdings of won.
Surprisingly, many Koreans seemed unaware of or unworried by the eco-
nomic problems.16
On November 21, 1997, South Korea turned to the IMF for help.
This was extremely humiliating! For a country that had become confi-
dent and self-assured through years of economic growth and success,
for the eleventh largest economy in the world to need to turn to the
IMF for help, was galling to many proud Koreans. The problem was
that there was US$60–70 billion in short term loans that would
come due within a year, and banks and firms had no way to pay
back those foreign loans without an infusion of cash coming from
somewhere. Banks carried 28.5 trillion won (US$27 billion) in bad
loans. 17 In the face of these problems, the stock market plummeted to
its lowest level since 1987. Both Lee and Kim agreed with the decision
to go to the IMF for help. 18
The IMF rescue package, in combination with other contributions
for South Korea, amounted to US$57 billion. But the decision to turn to
the IMF for help was highly combustible. Massive protests erupted and
two thousand students, workers, anti-IMF protestors took to the streets
on several occasions in early December.19 These very protesters were the
core of Kim’s support base. Hence Kim made a statement that said, in
essence, he agreed with the IMF principles, but not with the details. This
vague statement caused the won to slide even further and one week
before the election, Kim stated clearly that he would abide by the agree-
ment with the IMF as it had already been worked out.20
DJ won the December 18, 1997, election with just over 40 percent of
the vote, Lee garnered 38 percent, and Rhee split the vote with 19 percent.
Kim’s margin of victory was a mere 2 percent. As part of his platform to
promote political reforms, Kim took office wanting to introduce a par-
liamentary cabinet system with more checks and balances (and an
enhanced prime minister position with which to reward Kim Jong Pil for
joining his ticket). The GNP still dominated the legislature, so Kim
would have a hard time pushing through some of his reforms.21
68 ● Political Change and Consolidation
Consolidation of Democracy?
Events Since 1998
After DJ’s electoral victory, he set about to implement a variety of policies.
He initiated a thaw in relations between South Korea and North Korea,
the aptly named “Sunshine Policy.” This included increases in human
and economic exchanges on both sides of the demilitarized zone (DMZ).
Kim also set about trying to reform and to curtail the power and behavior
of the chaebol. Beginning in the 1970s under Park Chung Hee the state
gave heavy support to the chaebol to mobilize resources for industrial-
ization. This worked quite well. With time, state power over these large
firms weakened. Roh and Kim Young Sam were less autocratic and the
chaebol became increasingly more powerful than the state bureaucracy
that had previously overseen them. This was a contributing factor in the
economic crisis. Kim came into office with a strong public mandate to
overhaul corporate practices and he tried to do so. Luckily, the economy
rebounded fairly well from the initial financial crisis. In 1998 there was
a contraction of 5.4 percent, and this bounced to 9.3 percent growth
in 1999; unemployment similarly improved from 8.6 percent in
February of 1999 to 4.8 percent in September 1999.28 Under these pos-
itive conditions Kim set about trying to restructure and reform the chaebol.
Perhaps one of the more successful example of this is the government’s
presiding over the restructuring of Daewoo. Kim also launched a series
of investigations into “unfair internal transactions of financial relations
between chaebol units.” One of the (many) problems with the chaebol
had been accounting slights-of-hand, where profitable units within the
conglomerate covered up for or transferred money to the unprofitable
units.29
Kim also worked to implement political reforms, but here he was not
terribly successful. One of his few successes was an agreement to change
electoral and representation arrangements. The single-seat system with
winner-take-all elections was replaced by a multiple-seat system where
two–four legislators would be elected from each (now larger) district.
Some seats would now be decided in party slates, some by candidate
72 ● Political Change and Consolidation
strengthening the GNP. 36 Kim was further put on the defensive when
his administration decided to investigate tax evasion by the media.
Twenty-three newspapers were investigated. Critics saw this as intimida-
tion and harassment of the press, especially harassment of those critical
of the government.37
With the economy faltering somewhat and losses in three by-elections
(two in Seoul, generally a New Millennium Democracy Party [NMDP]
stronghold, and one in Kwangwon) there was discussion within the party
about the need for reshuffling and image building. On November 7,
2001, DJ announced he was resigning as head of the NMDP. He argued
that this move would help him focus better on economic and policy
management since now he would be free of partisan loyalties.38
vote, 48.9 percent to Lee’s 46.6 percent.43 Many celebrated Roh’s victory
as a shift in class politics in South Korea. He was the first president
elected from a poor background. However, regionalism was alive and
well and helped determine the election’s outcome. Roh and his supporters
hoped that his victory would signal an end to the old system of money
politics and factionalism. However, Roh turned out to be a weak leader.
Politics become more polarized between conservatives and progressives,
there was an increasing number of labor strikes and organized protests.44
Roh’s inner circle was largely inexperienced in administration and he was
unsuccessful in overcoming clashes with the conservative-controlled
National Assembly.
Strikes and protests became more militant and police reacted with
Molotov cocktails and arrests. The MDP was increasingly factionalized
and finally Roh and thirty-five other members left and formed a new
party, Open Our Party (URI), along with five defectors from the GNP.
Still politics did not settle down. Finally, in the fall of 2003 Roh
announced he would seek approval to stay in office. The National
Assembly voted against Roh and charged that he had violated electoral
laws. The GNP, the opposition party, controlled the legislature and they
alleged that Roh had violated election law by supporting URI candidates
and by not staying neutral. Also, the GNP argued that the president
should be impeached for his involvement in illegal campaign funding by
his aides.45 For two months he was a lame duck, unable to govern. In the
April 2004 elections, the URI won a slim but outright majority in the
National Assembly; however, it subsequently lost its majority after a
handful of URI assembly members were forced out of their seats by a
combination of political infighting and election fund-raising scandals.
The Constitutional Court reinstated the impeached president and
overturned the earlier vote on possible election violations.46
Significant by-elections were held on April 30, 2005, and the Uri
Party was unable to do well. The GNP won five out of six contested
National Assembly seats. This was a terrible blow to President Roh and
his party. Already weakened by the five legislators who had to resign for
electoral law violations, the GNP as of 2005 has one hundred and
twenty-five seats in the legislature, enough to block Uri from having a
majority. There thus seems little likelihood of continued political
reforms such as the elimination of the controversial National Security
Law, which Roh had wanted to do away with.47 While the inability of
Roh and his party to enact further political reforms is unfortunate and
does not bode well for strengthening democracy, one can see signs that
voters are holding representatives accountable for their actions and not
South Korea ● 75
The nation graduated from the IMF’s oversight, thus economic incentives
for political reforms, particularly those that aimed to reform the chaebol
and money politics, were weakened. (More about the chaebol will be
discussed shortly.) Internal dynamics among political elites have also
changed. DJ in 1997 was seen as a credible force for democratization. He
was a longtime democracy activist and was seen as outside of the old
clique of leaders associated both with the authoritarian order and with
corrupt political practices. However, Kim too suffered from scandals
involving his sons and close associates. Hence, his power as an advocate
of change weakened over time. Roh too seemed to take office with the
promise of belonging to a new breed of leaders, unconnected to old ways
of politicking. However, he has clearly been hobbled by his own and his
party’s shortcomings. This may be the paradox of attempts at democratic
consolidation in Korea. While too strong an executive could be a
problem for democracy (no checks and balances), too weak an executive
means that reforms may not take place. The latter seems to be the case in
Korea.
political system may support the ideals of democracy but then fail to
support their new democratic regimes when they fall short on those
ideals, or when they are not able to deliver economic goods as efficiently
as the authoritarian regime did.
Contradictory findings about democratic values could also indicate a
difference in citizens’ understanding or preference of what democracy is
for. It could be that public attitudes about democracy reflect the viewing
of such a political system as an effective means of improving their lives
and/or welfare, instead of seeing it as a system for improving their rights
and role in governance.51 If the former is the case, then the economic
crisis and later employment problems would certainly call into question
the value and appropriateness of democracy. However, the economic
crisis did serve to enhance democracy; hence, this might seem to indicate
that South Koreans view their political system as a mechanism for both
ensuring social well-being and protecting rights, with a preference for
economic concerns over civil rights. These conflicting attitudes about
democracy could well help explain why it has proven so difficult to fully
consolidate democracy in Korea.
South Korea and the North and between South Korea and the United
States have changed dramatically over the last fifteen years. While students
(and to some extent labor forces as well) in South Korea have a history of
skepticism and even hostility toward the country’s relationship with the
United States and to having U.S. troops stationed in the country, military
dictators saw the United States as a staunch ally and supporter. Relations
with the United States began to change under DJ. Kim’s relaxed and
engagement-seeking policy toward the North came at a time when the
United States was trying to decide how to deal with the possibility of a
nuclear North Korea. Engagement was politically unpalatable to many
in the U.S. Congress (as it is now), so Washington sometimes has issued
critical statements about South Korean policy. Additionally, many in
South Korea viewed the IMF as an extension of the United States or at
least as promoting economic interests aligned with the United States.
Thus, anger at the IMF was also manifest as anti-U.S. sentiment.
Despite these fractures in the relationship with the United States, I
think there is an argument worth making that U.S. interests in Korea
helped facilitate (they certainly did not cause) democracy in the late
1980s and during the economic crisis. Also, a change in U.S. foreign
policy goals after 9/11 has perhaps been a small factor in the stalling of
(or the discontinuous nature of ) further democratic reforms thereafter.
As discussed in other chapters, the forces of global capitalism (investors
and multinational corporations) along with the IMF (within which the
United States is the largest contributing member) put pressure on coun-
tries suffering from the 1997 financial crisis to enact certain economic
reforms. While the IMF’s main concern is economic policy making, it is
impossible to divorce fiscal and monetary policies from the larger political
arena. So, pressures to conform to IMF requirements and adjustments
had negative effects on political elites in Thailand, Indonesia, and South
Korea. Leaders in these countries were forced to enact policy reforms
that hurt well-entrenched interests. This had the (perhaps) unintended
consequence of empowering a new set of politicians and democracy was
further facilitated. The United States was delighted to see two of its
interests cojoined, the advancement of liberal capitalism and liberal
politics.
After 9/11 the United States has been focused almost exclusively on
security concerns, both relating to terrorism and to fears of nuclear
weapons proliferation. North Korea poses a serious threat to U.S. inter-
ests as defined by the Bush administration and it was included in Bush’s
famous “Axis of Evil” speech. The North has continued to defy the world
community and refuses to negotiate or fully discuss its nuclear, biological,
South Korea ● 79
Chaebol Reform
Political reforms and liberalization are deeply connected to the power
and influence of big conglomerates. During periods of successful political
reforms, political elites have been able to enact legislation to curb the
power of the chaebol. When political reforms stall, it seems that chaebol
reassert their dominance. During Korea’s military regimes, the chaebol
were protected and nurtured by their political supporters in power.
Thus, they grew enormously in economic and political power. The first
civilian president, Kim Young Sam, attempted to execute sweeping
reforms of these economic powerhouses to expand democracy to the
marketplace and to weaken the power of money in politics.55 Kim Young
Sam had an ambitious list of goals for reforming the chaebol. If his
agenda had succeeded, the chaebol would have been forced to democratize
internal management (separate ownership from management), promote
fairer competition for small and medium-sized as well as foreign firms,
and limit the number of areas of business that a firm could engage in and
also mutual loan guarantees among chaebol member companies. None
of these policies were successfully implemented. Kim was able to push
through policy requiring real-name accounts in financial transactions,
which was meant to address problems of corruption and hiding of ill-
gotten gains from payoffs.56
DJ was more successful at pushing for chaebol restructuring and
reform, but he still did not fully succeed in weakening their political
clout. Kim was more of an outsider; he did not have the long-standing
ties to the chaebol that might have made him timid to tackle their power.
Also, because of the economic crisis, the IMF’s restructuring requests
put greater pressure on the government to take action against the chaebol.
Conclusion
It is interesting that South Korea, Indonesia, and Thailand, despite having
different political systems and different levels of political openness, all
underwent political reforms in the aftermath of the economic crisis. Of
these three countries, South Korea in 1997 was already fairly democratic.
There were regular, free, and competitive elections in South Korea
beginning in the late 1980s. The media was already free and able to
South Korea ● 81
Introduction
In Indonesia the economic crisis helped push President Suharto out of
office after more than thirty years in power. Since the spring of 1998
when Suharto stepped down, Indonesia has undergone massive political
change. The country is now on its fourth post-Suharto president, the
constitution has been changed, new political parties have been born, the
military’s role in politics has shrunk, and local governments have been
given new control and authority. Yet, democracy still faces serious hur-
dles. Given that the economic crisis helped bring about political reform
in 1997/98, what has happened since the crisis abated? Have changes
been institutionalized or consolidated, why or why not? In order to
answer these questions, the chapter looks at several factors that impact
political change: the role of external pressures (from either the IMF or
globalization more generally, as well as pressure from U.S. policies to
combat terrorism), internal pressures from civil society, the military, and
elite cooperation or alliances (i.e., political cooperation or disagreement
among top politicians).
Democracy has only been weakly consolidated in Indonesia although
reformasi (political reform) has been far-reaching and significant. Why
has the democratic potential not been fulfilled? The answers are
complex: to begin, external pressures have changed. In 1997/98 the IMF
and global investors supported political changes so that there would
be greater accountability and transparency to protect their assets.
Indonesia, like Thailand and South Korea, has graduated out of its IMF
program and now there is greater pressure for stability and for rooting
84 ● Political Change and Consolidation
out terrorism. The IMF no longer has billions of dollars at stake and
political reform and accountability are secondary to more significant
security goals. Likewise, internal pressure for democracy has weakened:
civil society has focused more on welfare or economic concerns than on
political changes, and while the military seemed to support political
change in 1998, and although the military’s formal role in politics has
shifted in South Korea, Thailand, and Indonesia, it is still a powerful actor
in the political process and may be an impediment to the consolidation of
democracy in Thailand and Indonesia. The danger in only having weakly
consolidated democracy is that in Indonesia, unlike in Thailand or South
Korea, it is not unreasonable to envision a return to a less democratic
order. It is unlikely that the country would revert back to hard-line author-
itarianism, but it seems possible that conditions could occur where some
of the democratic political changes that have occurred are overturned.
more leftist and he was less able to play one powerful group off of the
others. Sukarno’s power collapsed because of his leftist sympathies and
because of his loss of military support. In his place General Suharto rose
to a position of supreme power.
children and his nearest allies, and reductions in subsidies, such as those
for oil and gas.
In January 1998 Suharto announced that he would seek reelection; it
would be his seventh term as president of Indonesia. He also hinted that
he would choose B.J. Habibie as his next vice president. Suharto’s
actions only served to further weaken investor confidence about reforms
in Indonesia’s economy, and public disapproval over how Suharto
was handling the economic crisis grew alarmingly. Mass demonstrations
increased throughout Indonesia in early 1998. On February 14, a different
sort of activism occurred. While most protests and demonstrations had
been peaceful, a different segment of society used the unrest to further
their sense of anger and resentment toward perceived beneficiaries of the
New Order. Rioters in Jakarta, Medan, and other cities burned and
looted shops. Churches were vandalized and burnt. Protests continued
in major cities during February; some protests, such as those by students,
were peaceful and mostly about political aims whereas others were violent.
Although police sometimes tried to break up the demonstrations and
riots, often police and military units stood by while protestors destroyed
private property and even attacked other people, mostly ethnic Chinese.
On March 10, 1998, Suharto was reelected by the legislature and was
given significant new power to confront the economic crisis. His
reelection triggered some of the largest and most fiery antigovernment
demonstrations in thirty years. Protests continued into the spring.4
May began with violent riots in Medan and other cities over price
increases resulting from reductions in government subsidies for cooking
oil and other necessities. Thousands of students continued protesting
against the regime. Some very notable and high-profile individuals
began calling for Suharto to step down. Muslim leader Abdurrahman
Wahid called for Suharto’s resignation and he pled with the nation to put
an end to the hostility toward the Chinese community. Wahid’s outspo-
kenness against the government gave encouragement to the students to
continue their protests and to take them outside the campus gates to the
streets.
On May 13, 1998, Jakarta police opened fire on thousands of student
protestors at Trisakti University. Six were killed and dozens wounded.
The next day protests turned horrifically violent. Hundreds of stores,
vehicles, offices, and homes were burned and looted. Most of the anger
and damage was directed at Indonesia’s ethnic Chinese minority because
of their perceived business ties with Suharto.
88 ● Political Change and Consolidation
Reformasi
The balloting held on June 7, 1999 was the most free and fair election
since the 1950s. Of the forty-eight parties competing, Megawati
Sukarnoputi’s. PDI-P won the longest share of votes with 34 percent.
Golkar, taking advantage of comprehensive local networks, won 20 percent
of the vote. Abdurrahman Wahid’s party PKB, and Amien Rais’ PAN also
had strong support. The President was chosen through an electoral-college
structure in October 1999. Although Megawati’s PDI-P won the highest
percentage of votes, she failed to gain the backing of other political elites
and at the very last moment Wahid was selected to be the president.6,7
Indonesia ● 89
Further Changes
From 1998 until 2004 there were numerous important changes to the
political system. The government that took office on October 20, 2004,
is more representative of the peoples’ wishes than ever before. The capstone
of reformasi was a constitutional amendment that called for the direct
election of the president (for a five-year term). Prior to 1998 the 1945
constitution stipulated the election of a national parliament, the DPR,
made up of party representatives and elected every five years. It is a
unicameral body. The DPR, along with a group of regional representa-
tives, the military, and other “functional groups,” formed the People’s
Consultative Assembly, the MPR, the most significant function of which
was to choose the nation’s president. The president appointed a cabinet
and was able to rule largely by decree. Suharto manipulated the parties
that “competed” in the DPR elections between 1977 and 1997 and con-
trolled the appointment of the other representatives who sat in the
MPR. The DPR served as a mostly rubber-stamp body for Suharto’s leg-
islation and the MPR reelected him to the presidency every five years.
In addition to initiating direct election of the president and vice pres-
ident, constitutional amendments adopted after 1998 have eliminated
the “functional” representatives in the MPR and replaced them with a
senate made up of 128 directly elected, nonpartisan members, 4 from
each of the nation’s 32 provinces.9 The MPR is now comprised of the
DPR and the senate together and its only real powers are to amend the
constitution, swear in the president and vice president, and to dismiss
them under very specific conditions. A constitutional court has also been
created to review laws and resolve disputed results of general elections
and to help protect human rights.10
After 1998 new political parties were also allowed to be formed (and
reformed). Suharto’s election vehicle, Golkar, continues to operate and to
90 ● Political Change and Consolidation
Elections of 2004
The year 2004 was a watershed one for Indonesia. Parliamentary
elections were held in the spring, and the first-ever direct presidential
election was held in two rounds. The initial balloting was in July and a
run-off between the two highest vote getters was held in September. The
national election on April 5 for the legislative branch showed how suc-
cessful the reformasi has been. With all the power of incumbency,
President Megawati’s party, PDI-P, suffered major losses, illustrating
voters’ dissatisfaction with her time in office. As mentioned earlier, PDI-P
won less than 20 percent of the popular vote, down from 34 percent in
1999. Golkar’s share of votes also shrank, although in absolute terms it
won the largest block of votes. Parties that did well included the PD led
by former general SBY and the PKS. Other moderate Islamic parties also
did well, but parties advocating Islamic law and an Islamic state did not
do well.
Five of the eight parties that captured more than two percent of the vote
in April were Islamic parties, but all of them had moderate leaders and
platforms. Four of the five tickets that competed in the July 5 election
included a moderate Muslim candidate, and yet a third of the voters
picked the entirely secular ticket headed by SBY.13
On July 5 the first round of the presidential election was held. Based
on the results of the parliamentary elections it was a five-way race for
president and vice president. Since none received a plurality of votes, a
runoff was scheduled for September 20. The two top vote getters were
SBY with 34 percent of the vote and Megawati with 27 percent and so
Indonesia ● 91
they faced each other in September for a final vote.14 The final vote on
September 20, 2004, resulted in a resounding victory for SBY. The former
general won 60.6 percent of the 110 million votes, about 20 percent
more of the popular vote than Megawati received.15 SBY’s popularity has
meant that many legislators, irrespective of party affiliation, have been
willing to work with him. Given the disarray and factionalism within
both Golkar (and since SBY’s vice president Kalla captured the Golkar
leadership in December 2004) and PDI-P, SBY has little coherent oppo-
sition in parliament. Rates of voter turnout were impressive for all three
rounds of elections in 2004; the highest participation came in the July
presidential race where about 82 percent of voters (125–126 million)
cast their ballot.16 Understandably, voter fatigue caused turnout to
decline from April to September.
The 2004 elections were significant for Indonesia for several reasons.
Most importantly, they were carried out by and large without violence or
massive fraud, and were open, free, fair, and contested by a multitude of
parties and candidates. Second, they showed that reform can happen and
have significant effects on the political system. Third, voters signaled
that they care mostly about bread-and-butter issues such as the state of
the economy and social welfare issues,17 but that there is growing concern
about security problems and violence (the bombings in Bali and Jakarta
and the sectarian violence elsewhere) as they could disrupt goals of
economic growth, or even undermine democracy and stability.
The elections also highlighted how far political reforms have come in
areas beyond just transforming political institutions. Two of the areas
where one sees dramatic positive change (although not without some
problems) are in the independence and variety within the media and in
the explosion of NGO or civil society activity. After the fall of Suharto,
Indonesia was viewed as the center of media freedom in the region.
There are a wide variety of media outlets and opinions. The amount of
critical reporting and commentary that exists would have been impossible
under Suharto. However, these freedoms may be shrinking. Indonesia’s
media is increasingly subjected to lawsuits and restrictions (such as in
Aceh), and physical assaults on reporters have been documented. This
violence seems to have been sponsored by powerful officials and busi-
nessmen with political backing. Private business interests and the military
are increasingly using the civil court system to control press coverage.
Tempo’s chief editor Bambang Harymurti was sentenced to one year in
prison for an article that alleged one of Indonesia’s most powerful busi-
nessmen, Tommy Wintata, stood to profit from a fire that had destroyed
part of a textile market. The same article included a statement from
92 ● Political Change and Consolidation
office through the spring of 2004, both Presidents Wahid and Megawati
talked about curtailing the military’s role in politics but it seemed that
TNI was able to retain power both behind the scenes and through insti-
tutional means.
One of the consequences of Gus Dur’s attempts to weaken the military’s
grip on power was the creation of greater factionalism among top leaders.
When General Wiranto was clearly calling the shots, there were few officers
in the military who would openly challenge him. Once he was removed,
other generals still held powerful positions in government but there was
less of a united block of military players pushing for a coherent set of
policy choices.
Nonetheless, by 2003–2004 TNI still carried a great deal of influence
on the political processes and policy decisions. However, 2004 may be
considered a turning point of sorts for this. While there were several
retired generals who ran for the post of president or vice president, the
military’s representatives in the MPR were are gone and active military
personnel were ordered to remain neutral in the elections, even to the
point of forgoing their right to vote. Likewise, with the 2004 elections,
there are no more appointed members in either the DPR or the MPR.
However, informally, the military is still enormously powerful as retired
officers have joined parties and run for elections. Also, the dense web of
military–business ties has been largely unsevered,23 and the TNI is still
territorially based throughout the archipelago. This, in effect, created a
parallel administrative structure to the government, allowing the army to
act as a type of localized paramilitary police was the means by which the
military’s dual power as a political force could be carried out.24
Perhaps one of the lesser-studied and most troubling elements of
Indonesia’s landscape is the existence of quasi-paramilitary groups with
ties to each of the major parties in parliament. Traditionally, these
groups have been mobilized to instigate popular demonstrations in favor
of the group’s patron, to keep order at party rallies or functions, or to
create a disturbance against opponents. When dissatisfied with elite
political agreements or contests, disputing politicians would mobilize
street protests against opponents and these paramilitary groups were
often part of such actions.25
and taxes both peoples’ pocketbooks and their faith in government. And,
although the military’s power is vastly weakened in the formal arena, it is
still active in extrajudicial killings and activities and is involved in illegal
enterprises such as blast fishing and illegal logging, which give it alternate
sources of income and a stake in holding on to territorial control in areas
where there are pockets of violence (sectarian or separatist). Additionally,
vote buying, patron–client ties, and a very weak judiciary mean that it is
hard to ensure a fair system.
So, how can we understand the significant positive changes that have
occurred and understand why democracy has a ways to go?
go forward and that politics would stabilize and leaders would be able to
make and implement coherent economic policy. Had political change
not occurred, members of the ruling elite in both countries faced the
threat of a further economic decline, something that was almost
unthinkable.
In Thailand, South Korea, and Indonesia the vital independent variables
(that helped bring positive change in the wake of the economic crises)
are now more concerned with either maintaining their own power or
more focused on security concerns than an democratic ones. These
variables include individual leaders, the military, and the international
community.
Externally, the IMF and global investors are now less worried about
or focused on accountability and transparency.42 Now major external
pressure is coming from the United States and its “war on terror.” The
United States and global investors are worried about stability and
antiterrorist actions.
Internal Pressures
In Indonesia, internal pressure has resulted in reforming the political
process, but the most difficult issues facing the country are economic
problems, the power of the military and paramilitary organizations,
100 ● Political Change and Consolidation
Corruption
Transparency International has rated Indonesia as the twelfth most
corrupt country in the world. It is the third most corrupt country in Asia
after Bangladesh and Myanmar. Corruption is not new. The New Order
administration created a myriad of informal systems of influence and
incentives for corruption. Although there have been massive political
changes since 1998, little progress has been made in fighting corruption.
This reflects powerful vested interests and weak law enforcement. While
corruption is often seen as a tax on business, there is now a great deal of
discussion of its impact on the poor. The poorest segment of the popu-
lation using health centers had to pay bribes for about one-third of their
visits and there are similar problems in the court system where poor
families are unable to pay the millions of rupiah in bribes to judges and
will inevitably end up feeling that justice is only for the rich.46
The Corruption Eradication Commission (KPK) is looking into
charges of kickbacks against the Indonesia Election Commission in last
year’s elections. On Friday, May 20, 2005, Nazaruddin Sjamsuddin, the
respected head of the Election Commission, was arrested for alleged
payments made by firms that won contracts to supply equipment for the
elections. Other senior commissioners are also under suspicion. In addi-
tion, Minister for Justice and Human Rights Hamid Awaluddin may also
be called in for questioning by the Anti-Corruption Commission.
President SBY has authorized graft probes into dozens of provincial
officials and several national legislators. No arrests have been made in
these cases.47 Cracking down on corruption is vitally important for
Indonesia, both for domestic and international reasons. Corruption, and
the perception of corruption, are some of the strongest underlying reasons
for popular discontent. Also, high levels of corruption certainly scare off
foreign investment. SBY has spoken a great deal about the need to
confront these problems head on, but there is a sense that certain political
and economic elements will be protected from prosecution. The
Indonesia ● 101
External Pressures
Globalization can be a positive force for political reform and liberaliza-
tion or it can harm the process of democratization. When South Korea,
Thailand, and Indonesia were under IMF bailouts, their policies were
under a microscope. Economic policy making was constrained by IMF
strictures. This impacted both policy making and politics. Now that all
three countries have graduated out of the IMF’s oversight, that external
pressure is gone.
When terrorists attacked the United States on September 9, 2001 and
then when the United States decided to attack Iraq in the spring of 2003,
Indonesia ● 105
Conclusion
Democracy successfully emerged in Indonesia between 1998 and 2004,
but further changes may be more difficult. In Indonesia leaders do seem
willing to “play by the rules of the game,” and given people’s interest in
voting (turnout was high in three rounds of national elections in 2004,
and although it has fallen off somewhat with each successive round, it
has continued to be high enough to be credible as local areas go to the
polls to elect provincial, district, and village leaders for the first time),58
they seem fully engaged in and committed to the ideas and behaviors of
democracy, but playing by the rules and attitudes supportive of democ-
racy may not be enough. Leaders either do not have the power or do not
have the will to fully rein in corruption, militant Islamic groups, or
106 ● Political Change and Consolidation
I
n 1997 Malaysia shared many common economic features with the
other countries hit by financial crisis. All had undergone rapid financial
liberalization without careful attention to corporate governance. There
was generally poor macroeconomic management and high levels of state
intervention in the economy. Loss of investor confidence in the summer of
1997 resulted in massive capital flight, first from Thailand, then markets
and investments plummeted in Indonesia, and Malaysia and finally in
South Korea. Malaysia, unlike Thailand, Indonesia, and particularly South
Korea, was not as severely affected by short-term debt problems, but it did
suffer from financial sector weaknesses coming from unwise and sometimes
politically motivated lending policies.1 Despite these similarities, Malaysia’s
reaction to the crisis was starkly different from that of her neighbors. As the
introductory chapter briefly explains, Malaysia did not turn to the IMF for
help, and although there was political turmoil (protests and a great deal of
new political activism and the formation of new political and social organi-
zations) in 1999 that was related to the economic crisis, Prime Minister
Mahathir and his party, UMNO, the United Malays National
Organization, maintained power and political control. Malaysia is most
commonly characterized as semi-authoritarian (something that will be
explained at greater length later in this chapter) and it remained so even
after the crisis and after considerable public pressure for change.
How can we explain the different political conditions and outcomes
in Malaysia? How was it that political reform, or “reformasi” as it was
called in Malaysia and Indonesia, was unable to gain enough strength to
overturn the old order? And what are the current prospects for political
reform in Malaysia today?
108 ● Political Change and Consolidation
disturbing the social order. The police used increasing levels of force to
confront the protestors. On October 14, Anwar was released from ISA
detention but remained in prison due to the charges against him.13
The demonstrations began to subside at the end of 1998 but politi-
cization continued in other forms. The Internet became the site of much
discussion and organization. Some of the earliest organizations formed
were the Gagasan Demokrasi Rakyat (The Coalition for People’s
Democracy), to work for a resolution to the political and economic
crises and to build a united, free, and democratic Malaysia, and the Majlis
Gerakan Keadilan Rakyat Malaysia (Council of Malaysian People’s
Justice Movement). These were formed by activists, intellectuals (such as
Dr. Chandra Muzaffar), and others. Membership of both groups over-
lapped and their goals included specific policy actions such as abolishing
the ISA and promoting a freer judiciary and media.14 Anwar’s wife,
Dr. Wan Azizah, formed the Pergerakan Keadilan Sosial (Social Justice
Movement, or ADIL) in December 1998 to help cement pro-Anwar feeling
and reform efforts. Anwar’s trial began on November 2, 1998. It was
widely perceived as politicized and unfair, and as such provided a rally-
ing point and a cause for groups to increase their visibility and support.
In April 1999, ADIL was transformed into the Parti keADILan
Nasional by taking over an existing minor party. The major opposi-
tion parties made the decision to contest the next elections under a
common platform, the Barisan Alternatif (BA). On July 2, 1999, the
four opposition parties, PAS (Partai Islam se Malaysia, an Islamic
party), DAP (Democratic Action Party), keADILan, Parti Rakyat
Malaysia (PRM, the socialist party), agreed to form the BA coalition
and they declared a common set of principles based on democracy and
the special position of Malays. References to an Islamic state or law
were absent; PAS had agreed to drop these goals in the interest of
coalition unity. 15
The opposition parties and NGOs also began a vigorous effort at
reaching out to supporters and others to gain a wider following. They
held ceramah (lectures held in offices or homes of supporters) and made
cassettes and videos with their ideas. Meetings were often emotional,
appealing to people’s sense of fairness, the cruelty of the regime to
Anwar, and the need for greater democracy. Money was collected to sup-
port the BA coalition. In April of 1999 large demonstrations were again
staged to protest the six-year jail sentence handed down to Anwar. Tens
of thousands attended a protest at PAS headquarters. Police retaliated
with violence and arrests and the demonstrations again waned. In June
1999 eight pro-reform NGOs established the Malaysian Citizens’ Election
112 ● Political Change and Consolidation
links are the basis for both the economy and the political system. It can
be quite damaging for a leader to jeopardize the economic power and
interests of those who in turn provide financial backing for political
leaders or for their family/friends. Now, Mahathir may not have needed
to sideline Anwar or impose capital controls to stay in power, but cer-
tainly doing these two things increased his power in the short term.
IMF constraints may be the missing independent variable to explain
why Malaysia did not go through a political change in the immediate
aftermath of the economic crisis and throughout the period following
Anwar’s dismissal, but it is not the answer for why Mahathir and the ruling
coalition were able to hang on to power as domestic criticism mounted
during the end of 1998 and into 1999. Even though they did poorly in
comparison with previous election results, the ruling coalition and
Prime Minister Mahathir maintained their lock on power in the 1999
elections. All the ingredients for an upset seemed in place. Opposition
parties joined forces to run as a coalition, there were issues that voters
cared about at stake (the economy, democracy, and Anwar’s fate, among
others), and pressure from outside Malaysia seemed to point against
Mahathir. Yet, no upset occurred. Why?
The reasons for BN success in the 1999 election have to do with the
nature of the electoral system, the media, ethnic relations, and the state
of the economy. Each of these will be explained in turn.
The Media
Most media outlets, particularly newspapers, are owned by companies
affiliated with the major BN parties. Press accounts tend not to be very
critical of the government. The government has generally assumed that
the function of the mass media is to help it spread information and
policies for the betterment of the population.
A greater grip on the press was administered in 1972 when the Malaysian
government decided to change the ownership structure of the press. This
decision was administered in 1974 as an amendment to the Printing
Presses Bill, which ensured that foreign ownership of Malaysian newspapers
would end and that Malaysians would be the majority shareholders of
local newspapers. This had devastating effects as Anuar (2000) further
explains. “On paper, such a move appeared laudable . . . but in practice,
however, it resulted in the monopolisation of the Malaysian press by
ruling political parties and their economic allies.” This development of
course guaranteed even further press control for the government which
was illustrated in the purchase of Malaysia’s leading newspaper group, The
Straits Times Press, by government-owned company Pernas in 1972.25
In 1987 three mainstream newspapers The Star, Sin Chew Jit Poh, and
Wantan also lost their publication permits for a brief period. Holding
corporations, associated with the dominant parties in BN, are now large
stakeholders in these and other newspapers.
The advent of the reform movement came at a time when Internet
usage was becoming quite high. NGOs and opposition parties such as
Keadilan and PAS used the web to get information out to people and
116 ● Political Change and Consolidation
supporters. They used e-mail distribution lists and the web to criticize
and attack Mahathir and the government.
Ethnic Relations
Malaysia is about 60 percent Malay, 30 percent Chinese, and 10 percent
Indian. These three communities have mostly lived together without vio-
lence. A bargain was struck in the run up to independence that the
Chinese and Indian communities would become full citizens and that
their economic assets would be unmolested, but they agreed that the polit-
ical system would be controlled by the Malays. The constitution defines a
Malay as someone who is a Muslim and who practices adat, that is, Malay
customs. As such, Chinese and Indians, the vast majority of whom are
Malaysian citizens but not Muslims, can never become “Malay.”26
In 1969 the ethnic tolerance broke down. The ruling coalition lost
more seats than expected in the election that year and this sparked
demonstrations and finally rioting in the streets of KL and elsewhere.
The Chinese were assaulted and their stores, homes, and property were
destroyed. The violence and damage became the justification for passing
the NEP or the New Economic Policy in 1971.27 Broadly speaking, this
was a set of economic policies put in place to favor ethnic Malays. The
riots were blamed on the inequality of the different communities. The
Chinese were dominant economically and the NEP aimed to redistribute
this economic power. Companies were told that they must hire certain
numbers of Malays, and ownership of companies needed to be diversi-
fied and parceled out to Malay investors. Universities set aside percent-
ages of their spaces for Malay students. The NEP sought to raise
bumiputera (Malay) share of corporate stock ownership from 1.5 percent
in 1969 to 30 percent in 1990. Government information suggests that
Malay ownership rose to 18 percent in 1990 and slightly over 20 percent
in 2000. UMNO argued that these measures were necessary both for
fairness among the different communities and for Malaysia to return to
ethnic harmony. Chinese businesses largely complied with the NEP
terms and over time a genuine Malay middle and professional class
emerged. In 1991 the NEP was replaced by the National Development
Policy and in 2001 by the National Vision Policy. The new policies have
greater emphasis on rapid economic growth and industrialization, how-
ever, there is widespread public perception that the NEP’s ethnicized
policy targets still stand.28
Regardless of one’s assessment of the NEP, there is no question that
UMNO took credit for a booming economy and fantastic changes in
Malaysia ● 117
Thirteen Muslims, many from PAS, including the son of its Chief
Minister in the state of Kelantan, were arrested under the ISA. The gov-
ernment described them as members of Kumpulan Militan Malaysia
(KMM), an extremist group that it accused of masterminding robberies, the
bombing and arson of three churches during the year, as well as murder.33
While arrests made under the ISA were unpopular and often subject to
criticism, this time the uproar was muted by a more militant line taken
by PAS who called for a jihad against the United States for the bombings
in Afghanistan. Mahathir and UMNO also criticized the United States’
actions, but Mahathir was careful to criticize those who advocated either
violence against the United States or even a boycott of American
products.34
In June 2002 Mahathir announced that he would be resigning the
following fall. Deputy Prime Minister Abdullah Badawi would replace
him as head of UMNO and as prime minister. Also in June 2002 PAS’s
leader Fadzil Noor died and Keadilan was further weakened by more ISA
detentions. Mahathir’s announcement was strategic in that the Malaysian
economy was looking strong and the effects of the economic crisis seemed
to be firmly behind him. Anwar was in jail and neither UMNO’s
elections nor the general elections were due imminently. When Abdullah
took over in October 2003, Malaysian politics were basically stable but
he saw his immediate job as healing the domestic divisions of the past
five years and preparing for UMNO elections in 2004 and for the
parliamentary elections after that.
During his first year in office Abdullah tried to pursue an agenda full
of political reforms. He advocated adopting good governance measures,
strengthening political institutions such as the judiciary, and improving
human rights protections. He also took a vigorous approach to corrup-
tion, issuing a number of indictments and creating the National
Integrity Plan (NIP) to reduce public graft. He created an independent
police commission and canceled several large expensive projects. These
efforts resulted in a strong electoral showing in the March 2004 elections.
BN won 90.8 percent of the parliamentary seats and recaptured
Terengganu, one of the states led by PAS. Opposition parties suffered
severe defeats. PAS won only one-quarter of the seats that it won in
120 ● Political Change and Consolidation
1999, and Keadilan had a miserable showing, winning only one seat in
parliament for leader Wan Azizah. The results seem to signal an end to the
multiethnic opposition coalition’s genuine challenge to BN supremacy.
Abdullah took all the coalition’s power away by adopting the mantle of
reform.35 However, few of his progressive ideas have been adopted and in
trying to transform the political system he inherited from Mahathir,
albeit perhaps only tinkering around the edges, he may be confronting
an entrenched UMNO elite who are unwilling to see change happen.
UMNO party elections were held in September 2004. While
Abdullah and his Deputy Prime Minister Najib Razak were uncontested
for their positions, several other key posts were to be decided. The vot-
ing did not go in Abdullah’s favor. Party elites were voting for three vice
president positions (of the party) and for twenty-five Supreme Council
members. Three cabinet members as well as seven deputy ministers, all
allies of Abdullah, were defeated. Many of his supporters were pushed
out of the Supreme Council. New members chosen were generally well-
connected to Mahathir or to Deputy Prime Minister Najib.36 Abdullah
may truly be facing challenges on all fronts. From within his own party
there are clearly forces that will resist change. From outside of UMNO,
opposition groups and voices could continue to get a boost from Anwar’s
release from prison in September 2004. While Anwar cannot run for
office until April 14, 2008 (unless he gets a royal pardon for his corrup-
tion conviction), he is becoming more politically active and will
certainly impact Malaysian politics without even running for an official
position. UMNO has said several times that Anwar will not be readmit-
ted to the party, but this could change in the future. He could also align
himself with his wife’s party, Keadilan, or with PAS. He is talking
politics and about the compatibility of Islam and democracy, and is
openly calling on Abdullah to push reforms forward even if this alienates
some stalwarts within UMNO.37
IMF looking over his shoulder, Prime Minister Mahathir could make
economic policy decisions that the global financial community and some
within his own government frowned upon. When the more “liberal”
policies tried by Anwar did not produce improved economic conditions,
it opened the door for Mahathir to sideline Anwar and his supporters
and eventually remove him entirely.
One of the things that this book argues is that political reform or
democratization is often an elite-driven process. While elites are empow-
ered by mass movements and popular support in one form or another, in
all of the countries in this volume, elites within the highest circles of
power and those within civil society play an enormously important role
in making political reform happen. In Indonesia Suharto’s closest allies,
including military and police officials, ultimately agreed that he needed
to step down. In Thailand the contest was between political elites who
favored passage of the new constitution and stalwarts who did not and
the former were able to trump the latter. In South Korea political
alliances among candidates and elite responses to the economic crisis
helped usher in a new administration at the close of 1997. In Malaysia
elite dynamics moved in the opposite direction. Instead of forcing
change and reform, Mahathir and his allies strengthened their position
by ousting those who might have opted for political change.
Political reforms come about when there is a confluence of factors.
When internal pressure from political elites combines with popular
protests and/or pressure from civil society groups and when external factors
such as international investors and the IMF favor reform-minded elites and
changes, then we are likely to see change. These factors all coalesced in
three of the countries studied here, but not in Malaysia. Now that the
economic crisis has fully passed, and Mahathir has retired, might
Malaysia join the ranks of more democratic Asian countries? I think it is
possible, but not likely in the short term.
Voices for reform in Malaysia include those of opposition parties such
as DAP and Keadilan and possibly PAS. While there is the potential for
these parties to win more seats in state and national parliaments, lately
they have been weak and unpopular. There are also a large number of
civil society organizations that would like to play a greater role in keep-
ing the government accountable and honest. However, NGOs are greatly
constrained in what they can do to check the power of the state. An array
of restrictive laws curtails freedom of expression, association, and assem-
bly. This makes it difficult for NGOs or civil society organizations to try
and publicize their activities and gain broader support for particular
causes.
122 ● Political Change and Consolidation
Role of Islam
Can Islam be a force for change within Malaysia or is it one of the forces
impeding change? While there is a lively debate within both academia
and the mainstream press about the compatibility of Islam with democ-
ratic institutions and values, Indonesia has shown that Islam can not
only coexist with democracy but can also be one of the forces or actors
that help democracy evolve. During the economic crisis, religious lead-
ers were among those calling for Suharto to step down and stating the
need for democracy and greater tolerance and ethnic/religious harmony.
Is Islam a similar force in Malaysia today? Yes and no.
PAS, the Partai Islam se Malaysia or the Pan-Malaysian Islamic Party,
was formed in 1950 because of a split within UMNO over the role of reli-
gion in politics. It has played an important role in criticizing UMNO and
questioning the credibility (on religious and ethical grounds) of leaders
such as Mahathir.39 PAS’s party platform has varied somewhat in the recent
past. In 1999 it muted its long-standing call for an Islamic state based on
sharia (Islamic law); it did so in order to keep the opposition coalition with
DAP and Keadilan in tact. More recently, PAS has renewed its call for
Islamic law and has suffered from the media’s portrayal of it as a radical
group, and the mainstream press has tried to implicate PAS members as
working with more militant groups such as al-Maunah.40 There is little evi-
dence that PAS is linked to violent Islamic groups either in Malaysia or out-
side the country. However, some of its members have made inflammatory
statements supporting Osama bin Laden and al Qaeda against the United
States and in opposition to the idea of a secular state.
PAS has had the chance to rule in Terengganu and Kelantan and an
analysis of what it has tried to do there presents us with a mixed impression
Malaysia ● 123
Conclusion
For now Malaysia is far from democratic. The political system is set up
to favor Malay dominance and the continued power of the ruling coalition.
Most of the large media outlets are fully or partly owned by one of the
parties in the BN. NGOs are constrained in their activity by laws that
limit assembly, speech, and association. The judiciary is in need of
reform and greater independence. Having said that, there are regular and
competitive elections and opposition parties do compete in the process.
Given the experiences of Malaysia’s neighbors, one would hope that it
will not take an economic crisis to bring reforms to the system. There is
another possibility for change in Malaysia. Former deputy prime minis-
ter Anwar Ibrahim is out of prison and is talking politics. He is critical
of Abdullah’s administration and of the race-based nature of Malaysian
politics. Anwar is forbidden from running for office until 2008. Despite
this prohibition, he is speaking loudly about the need for reforms and
this may empower other people to criticize or challenge the status quo.
We do not know if he is truly a reformer, someone who would open up
Malaysia ● 127
the system and change the structure and rules of the game, but he may
have the charisma and clout to do so.
Because the pressures for reform were different or lacking in Malaysia
than in Thailand, South Korea, and Indonesia in 1997/98, ruling elites
were not forced into reforms. If political elites, Anwar or someone else,
initiate reforms from a position of internal strength, democracy in
Malaysia may in fact look very different from democracy in other Asian
countries. Perhaps it would look more like Japanese politics, with a dom-
inant party in power and strong government guidance in the economy,
rather than the newer democracies such as Indonesia where no party is
dominant, or South Korea and Thailand where personal charisma matters
more than institutions such as political parties. For now it is too soon
to tell.
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Conclusion
N
o democracy is perfect or ideal. Even long-standing democracies
such as the United States, Great Britain, and the countries of
Western Europe have scholars, politicians, and citizens arguing
about the fairness of the system, better ways of conducting elections,
improving political representation, and the problems of money politics
and patronage. The countries examined here, Thailand, South Korea,
Indonesia, and Malaysia, have less experience with democracy and
arguably have further to go in achieving a more just, fair, and represen-
tative political order for their citizens. Despite a great deal of optimism
and effort from a lot of people, the promise of cleaner, fairer government
has not been fully achieved in Thailand, South Korea, or Indonesia.1
Having said this, all three countries, especially Indonesia, have made
tremendously positive changes in their political systems over the last
eight years and although there are institutional, cultural, and economic
changes that should be made to improve politics, the chances of rever-
sion to authoritarianism are small. One cannot state often or strongly
enough what a positive development that is! How well do the
experiences of these three countries conform to the ideas laid out in
the theoretical literature on democratic transitions and consolidation?2
How fully has democracy been consolidated and what problems still
exist in Thailand, South Korea, and Indonesia? Do problems with
democracy (high levels of corruption, e.g.) necessarily mean that democ-
racy is not consolidated? Finally, from looking at these countries, what
conditions might need to exist in Malaysia in order for democratization
to take hold? These are the questions that this conclusion to the book
will assess.
The introductory chapter plus the individual country chapters iden-
tified the 1997–1998 financial crisis as a pivotal event in understanding
political reforms and democratization in Asia. All four of the countries
discussed shared the painful experience of the economic meltdown
130 ● Political Change and Consolidation
will, and harms the government’s ability to pass and implement policies
of good governance. South Korea’s corruption score, as calculated by
Transparency International, is a 4.5, where 10 is the cleanest and 1 the
most corrupt a country could score. South Korea ranks in 47th place out
of 145 slots (there are more than 145 countries in the list since some
countries share a spot with a tied score) listed; this puts the country
behind South Africa and just ahead of Seychelles.7 Corruption in Korea
manifests itself in close ties between businesses and politicians and in the
habit of politicians of having family members and/or friends take advan-
tage of political ties to win business contracts with well-connected busi-
nesses. Attempts to thus make the political economy more transparent
and to hold elected officials accountable for their actions and those of
their associates would improve democracy.
In 1997 Indonesia was clearly an authoritarian regime. Suharto kept
a tight rein on the formation and activity of political parties, elections
were a tool for perpetuating his power, there was little freedom of the
press, civil society organizations were weak and mostly apolitical, and
the legislature was a rubber stamp for Suharto and his allies. The military
occupied a privileged position in politics, the economy, and on issues of
internal security. Today this has changed completely. The military has
been removed from formal politics, there are dozens of political parties
competing in mostly free and fair elections, and elections are held at
both the national and local level. While the executive branch is still more
powerful than the legislative branch, the legislature certainly cannot be
counted on to blindly support the president, and it has acted as a check
on presidential power. This was clearly the case when they impeached
President Wahid. The press is by and large free and some outlets can be
counted on to be critical of the regime. Civil society has exploded and is
increasingly trying to influence political decisions.
These enormous and far-reaching political reforms came about as a
direct result of the economic crisis. The crisis called into question
Suharto’s position and legitimacy. He had staked his regime on the
promise of economic growth. The financial crisis illustrated the corrup-
tion and inequality that was at the heart of his economic development
strategy. The IMF conditions for the bailout money required Suharto to
take measures that both angered his allies (ending monopolies in some
industries and closing insolvent banks) and the masses (reducing fuel
subsidies). When protests escalated in the spring of 1998, even his
closest military and business associates decided that it was time for him
to go. His resignation in May allowed B.J. Habibie to preside over some
of the most far-reaching political reforms within the whole region.
134 ● Political Change and Consolidation
Between May of 1998 and 2004 sweeping legal and institutional reforms
transformed Indonesia into a vibrant democracy.
However, as the chapter on Indonesia makes clear, there are lingering
problems in the country that I think prevent a further consolidation of
democracy. Problems include territorial and sectarian violence, an
extremely weak judiciary, corruption, and unresolved issues about political
Islam. These are hardly small or easy problems to tackle, but until indi-
vidual security is assured, either in contested areas such as Ambon or
Papua or for religious or ethnic minorities, it is hard to argue that full
democracy exists. To solve Indonesia’s problems will require further
weakening the military and entrenched economic and political elites
who benefit from the current arrangements. It does not seem likely that
this will happen in the near future.
Malaysia is the most stable and least democratic of the countries stud-
ied here. Prime Minister Mahathir avoided the fate of his neighboring
leaders in 1997/98. He was able to stay in office partly because he
refused to go to the IMF for help; thus, he could enact economic policies
such as pegging the ringgit and making it nonconvertible, which other
Asian economies could not do. He was also able to remain in power
because he outmaneuvered and had arrested his main rival, Deputy
Prime Minister Anwar Ibrahim. Arresting Anwar, however, triggered the
largest protests in recent history and for a brief while in the fall of 1998
it seemed that Mahathir too might be vulnerable. Business and UMNO
elites maintained their support for him, minority communities quietly
supported the status quo, and as the economy recovered, some of the
steam was taken out of the protests.
Mahathir was able to stay in office until he retired at a time of his own
choosing; Abdullah Badawi took over from Mahathir in October 2003.
Mahathir felt able to step down because the economy was clearly on the
rebound, the global war on terror gave him credibility in attacking the
key opposition party Partai Islam se Malaysia (PAS) for advocating
Islamic law and in cracking down against militant Islamic groups (and
others) in the name of security. Anwar had been convicted and was in
jail, and both UMNO party elections were far away enough for Abdullah
to have the time to gather support. Since taking power, Abdullah has
talked about political reform but has done little. Anwar was released
from jail in the summer of 2005 and immediately began criticizing
Malaysian politics. He cannot run for office until 2008 but is already
lambasting UMNO and the political system as one that perpetuates race
and class divisions. It seems unlikely that Anwar will pose much of a
threat to the current regime, at least in the short term. However, it is
Conclusion ● 135
possible that over the next few years the political system could undergo
a transition, not unlike the one that occurred in South Korea or Thailand.
For this to happen, there would need to be a crack in the door somehow,
a reform-minded leader would have to decide that it was in his or her
best interest to change the political system so that it is not so rigged in
UMNO’s favor, and would have to allow for the easier formation of
other political parties, media outlets, and public gatherings. These
things are not hard to imagine in Malaysia, but they do not exist in a
meaningful way at this point in time.
Status of Democratization
The literature on consolidation of democracy focuses mostly on the sta-
mina and duration of democratic procedures and on the willingness of
leaders and citizens to both play by the rules of the game and to believe
that democracy is the best system. Going back to Linz and Stephan’s cri-
teria for democratic consolidation, South Korea, Thailand, and
Indonesia all seem to meet the behavioral elements of democracy. There
are no widespread, significantly powerful actors spending huge resources
to try and overthrow the democratic order.15 Linz and Stephan’s second
litmus test for democratic consolidation has to do with attitudes about
democracy. While it seems clear that democratic attitudes have taken
hold in Indonesia (turnout and support for national and local elections
have been high and people tell surveyors that they favor democracy over
other political systems),16 it is less clear that Thais and South Koreans
seem to value democracy over other systems or priorities such as social
Conclusion ● 139
Country 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Data from 1997 to 2000 is from the GDP, gross domestic product. Asian Development Bank, Asian
Development Outlook, 2001, and figures from 2003 to 2005 are from Asia Regional Information Center
(ARIC), Pacific Economic Outlook, www.Aric.adb.org. Data for 2001 to 2002 is from (Paul Aho. “The out look
for Asian Feed Demand.” USDA Agricultural Outlook Forum. Washington DC February 17, 2006 GDP,
gross domestic product.
four countries have rebounded from the crisis (table C.1; Indonesia’s
recovery has, not surprisingly, been the slowest), there has not been a
consistent resumption of the impressive levels of economic growth seen
before 1997 (prior to 1997 all four of these nations had consistently seen
economic growth rates above 7 percent).
Populations had become accustomed to significant improvements in
their material well-being every few years. In the eight years since the cri-
sis, this has not reoccurred. So, instead of focusing dissatisfaction on the
nature of the political system, people are making more demands that are
specific to social welfare concerns. Leaders such as Prime Minister
Thaksin, who make popular promises (and deliver on them), are able to
retain support even though they may be subverting the democratic sys-
tem in some (or many) ways.
Further democratization may also be stymied by external pressure on
governments to act more aggressively on security matters. While the
IMF may have inadvertently acted as a positive force for political
reforms, today the United States and the global community are more
concerned with security problems and terrorism than with corruption
and cronyism in our allies. South Korea is confronted with a nuclear
North Korea on its border and although successive leaders have pursued
an active policy of engagement with the North, the United States would
both like to see South Korea fall back into its orbit and also put more
pressure on the North to negotiate the monitoring of these weapons.
Because the United States is so concerned with the nuclear issue, it may
be less likely to fault the South Koreans about flaws in their democracy.
In fact, there have been no recent public statements made by the United
States about concerns over South Korean democracy.
Both Indonesia and Thailand have come under pressure from the
United States to take more aggressive actions against militant Islam.
Conclusion ● 141
Final Thoughts
In countries where democracy has not taken hold, economic crises can
jeopardize the legitimacy of authoritarian leaders. This is especially true
for leaders who have staked their rule on the promise of economic
performance, as Suharto did. In countries that are partially democratic,
or that have previously made some political reforms, economic crises can
be the push that really changes the system, and this is exactly what hap-
pened in Thailand and South Korea. Economic crises can illustrate flaws
in the system and problems with leadership, and when people’s welfare
takes a turn for the worse, there needs to be a mechanism for penalizing
leaders responsible.
Counterintuitively, in the more recent waves of democratization,
financial problems do not appear to doom the odds of democracy
142 ● Political Change and Consolidation
Introduction
“Economic Crisis and Political Change: Indonesia, South Korea, and Malaysia,”
World Affairs 166, no. 4 (2004): 185–196. Reprinted with permission of
the Helen Dwight Reid Educational Foundation. Published by Heldref
Publications, 1319 18th Street, Washington, D.C. 20036–1802. www.Heldrf.
org. Copyright © American Peace Society (2004).
1. N. Ganesan, “Malaysia in 2002,” Asian Survey 43, no. 4 (2003): 147–155.
2. Robert A. Dahl, “What Political Institutions Does Large-Scale Democracy
Require?” Political Science Quarterly 120, no. 2 (2005), 187–197.
3. The three most prominent works on transitions to democracy are: Guillermo
O’Donnell and Philippe C. Schmitter, Transitions from Authoritarian Rule:
Tentative Conclusions about Uncertain Democracies (Baltimore: Johns Hopkins
University Press), 1986; Samuel P. Huntington, The Third Wave:
Democratization in the Late Twentieth Century (Norman: University of
Oklahoma Press), 1991; and Adam Przeworski, Democracy and the Market:
Political and Economic Reforms in Eastern Europe and Latin America (NY:
Cambridge University Press), 1991.
4. Philippe C. Schmitter, “On Civil Society and the Consolidation of Democracy:
Ten General Propositions and Nine Speculations about their Relation in Asian
Societies.” Paper presented at an International Conference on Consolidating
the Third Wave Democracies: Trends and Challenges, Taipei, August 27–30,
1995, and Larry Diamond, “Rethinking Civil Society: Toward Democratic
Consolidation,” Journal of Democracy vol. 5, no. 3 (1994): 3–17.
5. Diamond, “Rethinking Civil Society,” 7–11.
6. For the debate on the relationship between civil society and the state, see the
following works: Peter Evens, Dietrick Rueschemeyer, and Theda Skocpol
(eds.) Bringing the State Back In (Cambridge, UK: Cambridge University
Press), 1985; Gabriel Almond. “The Return to the State,” American Political
Science Review 82 (1988): 853–874; and Timothy Mitchell. “The Limits of
the State: Beyond Statist Approaches and Their Critics,” American Political
Science Review 85, no. 1 (March 1991): 77–96.
7. Larry Diamond and Juan J. Linz, “Politics, Society, and Democracy in Latin
America,” in Larry Diamond, Juan J. Linz, and Seymour Martin Lipset (eds.),
Democracy in Developing Countries (Boulder, CO: Lynne Rienner), 1989, 1–59.
144 ● Notes
8. Adam Przeworski, Democracy and the Market: Political and Economic Reforms
in Eastern Europe and Latin America (Cambridge: Cambridge University
Press), 1991.
9. Samuel Huntington, Political Order in Changing Societies (New Haven, CT:
Yale University Press), 1968, 41.
10. John B. Londregan and Keith T. Poole, “Poverty, the Coup Trap and the
Seizure of Executive Power,” World Politics, 42, no. 1 (1990): 151–183.
11. Raymond Duch, “Economic Chaos and the Fragility of Democratic
Transitions in Former Communist Regimes,” Journal of Politics 57, no. 1
(1995): 126.
12. Karen Remmer, “The Political Impact of Economic Crisis in Latin America
in the 1980s,” American Political Science Review 85, no. 3 (1991): 777.
13. (Ibid., 794).
14. Mark J. Gasiorowski, “Economic Crisis and Political Change: An Event
History Analysis,” American Political Science Review 89, no. 4 (1995): 892.
15. Robert O. Keohane and Helen V. Milner (eds.), Internationalization and
Domestic Politics (NY: Cambridge University Press), 1996, 4.
16. The notable contribution of “second image reversed” thinking is that
international factors (institutions, agreements, laws, etc.) impact domestic
decision making, rather than second image explanations, which find that
domestic politics affects how a country behaves in the international arena.
17. These two works are leaders in the field in terms of initiating the discussion
about the relationship between international affairs and domestic politics.
Peter Gourevitch, “The Second Image Reversed: The International Sources
of Domestic Politics,” International Organization 32, no. 4 (1978):
881–912 and Peter J. Katzenstein, (ed.), Between Power and Plenty: Foreign
Economic Policies of Advanced Industrial Countries (Madison, WI: University
of Wisconsin Press), 1978.
18. Keohane and Milner, Internationalization, 16–17.
19. Henry S. Bienen and Mark Gersovitz, “Economic Stabilization, Conditionality,
and Political Stability,” International Organization 39, no. 4 (1985): 747.
20. Ibid., 735.
21. Samuel J. Valenzuela, “Democratic Consolidation in Post-Transitional
Setting: Notion, Process, and Facilitating Conditions,” in S. Mainwaring,
G. O’Donnell, and S. Valenzuela (eds.), Issues in Democratic Consolidation:
The New South American Democracies in Comparative Perspective (Notre
Dame: University of Notre Dame Press), 1992, 57–104.
22. Andreas Schedler, “Measuring Democratic Consolidation,” Studies in
Comparative International Development 36, no. 1 (2001): 66.
23. Ibid., 12 (pagination reflects Internet download of article).
24. In the case of Indonesia there are certainly regional separatist movements, in
Aceh and Papua, e.g., however, these forces are not challenging the govern-
ment at the national level.
25. Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and
Consolidation (Baltimore: Johns Hopkins University Press), 1996, 6.
Notes ● 145
46. Ibid.
47. Michael Baker, “Tear Gas and Protests Waft Away as South Korean Students
go Quiet,” Christian Science Monitor August 20, 1989.
48. The logical explanation for the decrease in student activism in South Korea
by 1997 is simply that the goals of the student movement dating from
Syngman Rhee’s rule in the 1960s and continuing through the 1980s had
largely been met. Once seen as the champions of democracy and greater
social justice, after successful political transformation of the late 1980s and
early 1990s, there was a sense that the major goals of previous demonstrations
had been met. Without a moderate cause to draw many supporters, students
still active on campus in the mid and late 1990s tended to be more radical
and called for reunification with the North under the North’s framework.
See Sheryl WuDunn, “Student Passion in Korea: What’s the Point?” The
New York Times June 21, 1997, A1.
49. Sang-Hun Choe, “South Korean Students, Workers Protest IMF Deal,”
Associated Press December 13, 1997.
50. The Kia controversy came after a year of problems within some of South
Korea’s largest firms (chaebol). Hanbo was the first company in early 1997
to face significant problems; the government made no effort to save the
firm’s management, instead they contributed a flood of new money to the
company and effectively nationalized it. Later in the spring of 1997, when
other large conglomerates faced similar problem (Sammi in March and Jinro
in April), the government encouraged state and private banks to announce
“anti-bankruptcy” policies that would allow them to continue to lend money
to failing firms. The government contributed to the program by pumping
money (liquidity) into the banking system. Still it was not yet perceived as a
dire crisis. Stephen Haggard, The Political Economy of the Asian Financial Crisis
(Washington, D.C.: Institute for International Economic), 2000, 56–57.
51. Ibid., 4.
52. Choe, “South Korean Students.”
53. Uk Heo, “South Korea: Democratization, Financial Crisis, and the Decline
of the Developmental State,” in Shale Horowitz and Uk Heo (eds.), The
Political Economy of International Financial Crisis (NY: Rowman and
Littlefield), 2001, 151–164.
54. Ibid.
55. Ironically, the legislature did not approve Kim Jong Pil’s appointment as
prime minister.
56. Ha, Yong-Chool, “South Korea in 2000,” Asian Survey 41, no. 1 (2001).
57. Ibid.
58. Hong Yung Lee, “South Korea in 2002,” Asian Survey 43, no. 1 (2003):
64–77.
59. Ibid., 72.
60. Financial Times Information, “ROK Daily ‘Special Report’ Examines
Regionalism in South Korean Politics,” Financial Times Information
December 24, 2002.
Notes ● 147
14. The brief discussion of Thai history recounted here illustrates that fear of
communism and a close relationship with the United States provided both
support for military spending, bolstering the power and prestige of the armed
forces, and acted as a pretext for cracking down on leftist or progressive polit-
ical groups throughout the 1970s. See Phongpaichit and Baker, Thailand
Economy for more information.
15. Michael Vatikiotis, “Free at Last,” Far Eastern Economic Review (hereafter
referred to as FEER) July 10, 1997, 70–71.
16. Ibid., 71.
17. Rodney Tasker, “Hard Times Roll,” FEER August 7, 1997, 27.
18. Edward Tang, “Chavalit Scrambles to Soften Political Fallout from IMF
Aid,” The Straits Times (Singapore) July 31, 1997, 23.
19. Michael Vatikiotis, “Backyard Repairs,” FEER August 28, 1997, 17.
20. Seth Mydans, “As Turmoil Builds, Thai Leader Shuffles Cabinet,” New York
Times October 25, 1997, A3.
21. Amon had credibility, he had served as the secretary general of the Council
of State, a high-level legislative review organization and was seen as a moderate
voice for change.
22. For more on the DDC, look at Duncan McCargo, “Introduction:
Understanding Political Reform in Thailand,” in Duncan McCargo (ed.),
Reforming Thai Politics (Amsterdam, Netherlands: Nordic Institute of Asian
Studies), 2002, 3. McCargo sees Dr. Prawase Wasi as a force for compromise.
23. Michael Kelly Connors, “Political Reform and the State in Thailand,”
Journal of Contemporary Asia 29, no. 2 (1999): 201–226.
24. The vote in parliament was originally slated for mid August but was pushed
to September to allow the CDA to finish their debate and because of the
chaos of the economic crisis.
25. Tasker, “Hard Times Roll,” 27.
26. Michael Vatikiotis and Rodney Tasker, “Holding On,” FEER August 28,
1997, 14–16.
27. Michael Vatikiotis and Rodney Tasker, “Danger Ahead,” FEER September 11,
1997, 22.
28. Michael Vatikiotis, “People’s Putsch,” FEER September 18, 1997, 14–16.
29. Ibid.
30. Facts on File. “New Constitution Approved.” Facts on File World News
Digest. October 23, 1997, 777D2.
31. Michael Vatikiotis, “Democracy First,” FEER November 6, 1997, 20.
32. Pressure came from popular protests, mostly from middle-class business
interests in Bangkok, and there is a good possibility that military leaders also
urged him to leave. On the day of his resignation, military leaders paid him
a visit. According to military sources in Bangkok, Supreme Commander
General Mongkol Ampornpisit, using army adviser General Surayud
Chulanont as an emissary, persuaded Chavalit to step aside. Michael
Vatikiotis, “No Quick Fix,” FEER November 13, 1997, 15.
33. Michael Vatikiotis, “The Next Battle,” FEER November 20, 1997, 28.
Notes ● 149
34. Samuel Huntington, The Third Wave: Democratization in the Late Twentieth
Century (Norman: University of Oklahoma Press), 1991, and the shorter
version of this work: “How Countries Democratize,” Political Science
Quarterly 106, no. 4 (winter 1991): 579–616; Adam Przeworski, Democracy
and the Market: Political and Economic Reforms in Eastern Europe and Latin
America (NY: Cambridge University Press), 1991; Guillermo O’Donnell
and Philippe C. Schmitter, “Tentative Conclusions about uncertain
Democracies,” in Guillermo O’Donnell, Philippe C. Schmitter, and
L. Whitehead (eds.), Transitions from Authoritarian Rule (Baltimore: Johns
Hopkins University Press), 1986; Donald Share and Scott Mainwaring,
“Transitions through Transaction: Democratization in Brazil and Spain,” in
Wayne A. Selcher (ed.), Political Liberalization in Brazil: Dynamics,
Dilemmas, and Future Prospects (Boulder, CO: Westview Press, 1986),
177–179.
35. Each scholar uses slightly different terminology to describe essentially the
same processes. Instead of detailing the differences among transition theo-
rists, I have chosen to use Huntington’s terminology and roughly his outline
for how transitions occur.
36. Huntington’s criterion of democratization is when a government is chosen
through an open, competitive, fully participatory, and fairly administered
election. Huntington, “How Countries Democratize,” 582.
37. Stephen Haggard and Robert R. Kaufman, “The Political Economy of
Democratic Transition,” in Lisa Anderson (ed.), Transitions to Democracy
(NY: Columbia University Press), 1999, 77.
38. Michael Vatikiotis, “Indirect Intervention,” FEER September 4, 1997, 14.
39. Ibid.
40. Edward Tang, “Chavalit Scrambles to Soften Political Fallout from IMF
Aid,” The Straits Times (Singapore) July 31, 1997, 23.
41. Vatikiotis, “No Quick Fix,” 15.
42. Tang, “Chavalit Scrambles,” 23.
43. Ibid.
44. Vatikiotis, “People’s Putsch,” 16.
45. Amy L. Freedman, “Economic Crises and Political Change: Indonesia, South
Korea, and Malaysia,” World Affairs 166, no. 4 (spring 2004): 185–196.
46. Karen Remmer, “The Political Impact of Economic Crisis in Latin America
in the 1980s,” American Political Science Review 85, no. 3 (1991): 777.
47. Note: this direct quote was written in the past tense but I feel it should be
in present tense because the detailed changes are still in effect.
48. McCargo. “Introduction,” 10.
49. Ibid.
50. Ibid.
51. For more on these oversight institutions see ibid. Also see Robert B.
Albritton and Thawilwadee Bureekul, “Developing Democracy Under A
New Constitution in Thailand.” Paper presented at the American Political
Science Association national meeting, Philadelphia, PA, September 2003, 2.
150 ● Notes
71. The Associate Press identified some of the dead, many of whom were
teenagers, as local villagers, including eighteen members of a soccer team.
Seth Mydans, “Thai Troops Flood Islamic Trouble Zone,” New York Times
April 30, 2004, 3.
72. Ibid.
73. Chomthonsdi, op. cit.
74. For work on civil society organizations in Thailand today, see LeeRay M.
Costa, “Activist Intellectuals: Scholar–NGO Interfaces in Thailand’s Civil
Society,” Asian Social Issues Program September 28, 2005; Antonio
Contreras, “State–Civil Society Relations and Forest Governance in
Thailand the Philippines.” Unpublished article from the web, 2000;
“Democratic Planning in Thailand: Khon Kaen Civic Assembly” shows a
model of local government/NGO cooperation and planning for develop-
ment programs.
75. Pathmanand, “Globalization and Democratic Development,” 4.
76. Amy Louise Kazmin, “Thailand Wooed by Prospect of Trade Pact with
U.S.,” Financial Times (London) November 19, 2003, 2.
77. Ibid.
78. Thaksin has been accused of covering up the mounting bird flu crisis in an
attempt to protect the US$1.2 billion poultry exporting industry. Sarah
Stewart, “Thai PM’s Fortunes take a Tumble with Back to Back Crises,”
Agence France Presse March 7, 2004.
79. Nattaya Chetchotiros, “Rivals Battle to End Thaksin Era,” Bangkok Post
February 9, 2005.
80. Robert Albritton and Thawilwadee Bureekul, “The Meaning of Democracy
in a Developing Nation,” MPSA: Midwest Political Science Association
Conference, April 3–6, 2003.
parties to form the Democratic Liberal Party and in 1994 was renamed the
New Korea Party. It became the GNP in 1996. The Uri Party was the New
Party for Participatory Citizens until October 22, 2003, when members of
the Millennium Democratic Party broke off to form Uri. The Democratic
Party has also seen many name changes. It started as the New Democratic
Party, and then became the New Korea Democratic Party, the Reunification
Democratic Party, the Party for Peace and Democracy, the Millennium
Democratic Party, and finally the Democratic Party. The United
Liberal Democratic Party was formed in 1995 and the name has remained
the same. The Democratic Labor Party was established in January 2000
as the party for the Korean Confederation of Trade Unions. The name has
remained the same. For more information and background, see U.S.
Department of State, South Korea Briefing, Library of Congress Country
Studies on South Korean political parties.
4. Doh C. Shin, Mass Politics and Culture in Democratizing Korea (NY:
Cambridge University Press), 1999, 179–180.
5. Meredith Woo-Cumings, “The State, Democracy and the Reform of the
Corporate Sector in Korea,” in T.J. Pempel (ed.), The Politics of the Asian
Economic Crisis (Ithaca, NY: Cornell University Press), 1999, 117–121.
6. In 1979 Kim Dae Jung was expelled from the National Assembly for “insult-
ing the president” (President Park). This sparked demonstrations in Pusan,
his base of political support. The government sent in troops to restore order.
The turmoil led to repression by military, and this ultimately led to
President Park’s assassination by a Korean CIA agent on October 26, 1979.
Kim was arrested by military leaders who took over (martial law had been
declared in Seoul after Park’s death). In May 1980, martial law was extended
throughout the country and resistance erupted all over the country. The
most determined demonstrations occurred in Kwangju; it took troops
ten days to put down the protests. On May 17, 1980, Kwangju demonstrations
against General Chun resulted in a massacre.
7. The DJP was the party associated with military rule under Chun and Park.
8. Shin, Mass Politics, 3. See also, Seung-Mock Yang, “Political Democratization
and the News Media,” in Larry Diamond and Doh C. Shin (eds.),
Institutional Reform and Democratic Consolidation in Korea (Stanford, CA:
Hoover Institution Press), 1999, 154.
9. Shin, Mass Politics, 4–5.
10. Two years after their convictions, they were pardoned and set free. Ibid., 7.
11. Woo-Cumings, “The State, Democracy,” 123.
12. Ibid., 124. See also I. Lieberman and William Mako, Korea’s Corporate Crisis
(Washington, D.C.: World Bank), 1998.
13. Ibid., 124.
14. Lee, “Pretty Picture,” 82.
15. Shim Jae Hoon, “Bridesmaid No More,” FEER September 18, 1997, 20.
16. Charles S. Lee, “The Next Domino?” FEER November 20, 1997, 14–16.
17. Charles S. Lee, “Out of Our Hands,” FEER December 4, 1997, 81.
Notes ● 153
40. Kim Young Sam is held in contempt by many Koreans because of his links
to the military regimes of the past, and more importantly because he has
been blamed for the financial crisis.
41. Ibid., 71.
42. This is a strange example of public opinion taking the place of actual voting.
Party members, remember, had already chosen Roh to run for president.
Ibid., 72.
43. Ibid.
44. Because Roh was elected with overwhelming support from labor and pro-
gressive groups, there were enormous expectations from these groups for
increased power. Thus, there were more strikes and unrest when expecta-
tions were not met. See Hong Yung Lee, “South Korea in 2003: A Question
of Leadership,” Asian Survey 44, no. 1 (January/February 2004): 130–143.
45. Byun Kuk-kun, “Election Law Violation to Dominate Impeachment
Review,” Korea Times March 15, 2004.
46. Victor Cha, “South Korea in 2004: Peninsular Flux,” Asian Survey 45, no. 1
(January/February 2005): 33–40.
47. Balbina Y. Hwang, “By-Elections in South Korea: Democracy Marches On,”
May 5, 2005, Webmemo #737, Heritage Foundation.
48. Nicholas Kristoff, “At Crossroads of Democracy, South Korea Hesitates,”
New York Times July 10, 1996, A3. Kristoff is quoted in Doh Chull Shin,
“The Evolution of Popular Support for Democracy during Kim Young Sam’s
Government,” in Diamond and Shin (eds.), Institutional Reform and
Democratic Consolidation in Korea (Stanford, CA: Hoover Institution Press,
Stanford University), 2000, 233.
49. Shin, Mass Politics, 75. (It should be noted that this data is based on surveys
conducted in South Korea from 1993 to 1997. One might imagine that
given the continued scandals and prevalence of money politics throughout
the 2002 election, Roh’s victory signals a further yearning for democracy
among the people.)
50. Shin, “The Evolution,” 254.
51. Ibid., 239.
52. For one such example, see the chapter on South Korea in Ezra Vogel, Four
Little Dragons: The Spread of Industrialization in East Asia (Cambridge, MA:
Harvard University Press), 1991.
53. The North Korean regime says that the weapons are to protect itself from
U.S. attack. The Bush administration worries that these weapons could be
used to blackmail the United States, attack the South, or sell for foreign
currency.
54. For good surveys of U.S.–South Korean relations in dealing with the North,
see the already noted articles from Asian Survey in the first issue of every year
from 2001 to 2005.
55. Eun Mee Kim, “Reforming the Chaebols,” in Diamond and Shin (eds.),
Institutional Reform and Democratic Consolidation in Korea (Stanford, CA:
Hoover Institution Press, Stanford University), 2000, 171–198.
Notes ● 155
56. For a list and full description of these policy objectives, as well as other
attempted reforms, see Ibid., 172–181.
57. Ibid., 185.
58. Berlin-based Transparency International, for instance, gave South Korea a
score of 4.5 on its 2002 corruption perception index, with “0” indicating
“highly corrupt” and “10” representing “highly clean.” The United States
scored a 7.7. The index aggregates surveys of “well-informed people” with
regard to the extent of corruption, defined as the misuse of public power for
private benefit, and indicated by the frequency of corrupt payments, the
value of bribes paid, and the resulting obstacle imposed on businesses.
Additionally, South Korean companies scored a 3.9—eighteenth lowest of
the world’s twenty-one largest exporters on Transparency International’s
bribe payers index, which measures perceptions of the likelihood that com-
panies will pay bribes when they do business abroad. “0” indicates “high
bribery” and “10” indicates “low bribery.” U.S. companies scored a 5.3.
Transparency International, Global Corruption Report 2003, 262–267,
http://www.globalcorruptionreport.org.
Journal of Democracy 11, no. 4 (October 2000): 95–107, and Mary Ann
Hadley, PhD dissertation for the NYU Politics Department.
45. Data from public opinion polls show that Indonesians’ top concerns are lack
of jobs and the prices of goods, followed by worry over the economy more
generally. The next concern is corruption. For the period before the elec-
tion, see the report by Valentino and Sharma, Indonesia Nationwide.
46. One of the best studies of how justice works at the local level is the World
Bank’s report Village Justice in Indonesia, February 2004. The report finds
that most villagers prefer to use informal means of dispute resolution than
going through the police and the courts. The reasons given for this are a lack
of control over the process once these channels are used, as well as fear of
retribution from officials or those higher in the social order. While the
World Bank report found that most of the time the police and the courts
worked as they were supposed to, the decisions were often not executed,
leading to further skepticism about the process and about legal institutions
in general.
47. “Indonesia Arrests Election Chief,” BBC News May 21, 2005.
48. See Jusuf Wanandi, “Islam in Indonesia: Its History, Development and
Future,” Asia Pacific Review 9, no. 2 (November 2002): 104–112.
49. For work on Islamic civic organizations and political parties, see Endy M.
Bayuni. “Terrorism Undermines Political Islam in Indonesia,” Yale Center
for the Study of Globalization, Yale Global Online, 2003. It should also be
noted that there is some concern and debate about just how “moderate” PKS
is. Sadanand Dhume views PKS as a bigger threat to Indonesian democracy
than the JI. See Sadanand Dhume, “Indonesian Democracy’s Enemy
Within,” FEER, May 2005: 38–42.
50. For work on moderate Islamic organizations, see Robert Hefner, Civil Islam
Muslims and Democratization in Indonesia (Princeton, NJ: Princeton
University Press), 2000, and more historically, C. van Dijk, Rebellion under
the Banner of Islam: The Darul Islam in Indonesia (The Hague: Martinus
Nijhoff ), 1981. For more on militant organizations see Abuza, Militant Islam.
51. The Justice Party was the first incarnation of PKS. In the 1999 elections it
did not reach the 2% threshold of votes to allow it to run in the next elec-
tions and so they formed a “new” party, PKS.
52. Muhammad Fuad, “Limits to Islamic Radicalism in Indonesia,” http://
www.india-seminar.com/2003/527/527%20muhammad% 20fuad.htm.
53. Abuza, Militant Islam, 24, and BBC News, “Indonesia’s Muslim Militants,”
August 8, 2003.
54. van Dijk, Rebellion, and, International Crisis Group, “Recycling Militants
in Indonesia: Darul Islam and the Australian Embassy Bombing,” Asia
Report no. 92 (February 22, 2005).
55. Abuza, Militant Islam, 141.
56. Two examples of this occurred in the summer of 2005. A small Islamic sect
Ahmadiyah was violently attacked in July. People were beaten and their
offices and Mosque were vandalized and torched by thugs claiming that
Notes ● 159
Ahmadiyah was an offense to Islam. The police stood by and did nothing.
Later in the summer, the leaders of the highest religious council, the
Council of Ulema (MUI), who were appointed by the Ministry of Religion,
issued a series of fatwas. Eleven fatwas were issued against religious plural-
ism and were aimed at promoting a more rigid version of Islam. The fatwas
reassert the supremacy of the Koran over other religions legally authorized
in Indonesia, such as Catholicism, Protestantism, Hinduism, and
Buddhism; make various moderate Islamic organizations, such as the Liberal
Islamic Network, “illegal”; and ban interfaith prayers unless a Muslim is
leading the service, interfaith marriages, and women leading prayers when
men are in attendance. Fatwas are not legal or binding. MUI members are
appointed by the government but their edicts do not have the power of law
and can be ignored or obeyed as people see fit. The government (SBY and
the Ministry of Religion) made little or no comment or response to the fat-
was. Like its (non)response to the attacks on Ahmadiyah earlier in the sum-
mer, the government seems to think that it can ignore these religious
tinderboxes and they will blow over. The second reason the fatwas are sig-
nificant is because they have illustrated the divide between moderate and
more hard-line voices within Islam. This divide is evident in MUI and
within Muhammadiyah and NU. Which side will come to dominate the
debate and place of Islam in Indonesia is incredibly important for democ-
racy. While most ordinary people will take little notice of the fatwas, it may
have a more chilling effect as a message to militant Islamic groups: that a
more intolerant version of Islam is acceptable and actually promoted by offi-
cial, mainstream forces, thus legitimizing the views of militant groups.
57. Many people argue that Indonesia (since the Bali and Jakarta bombings) has
been more forceful at arresting militants; over 250 people have been arrested
in connection with terrorist actions. However, the government would like to
carry out these actions in such as way that they are not seen as targeting
good Muslims or acting because of pressure from the United States. For arti-
cles on U.S. pressure on Indonesia see CNN, “Indonesia Feels Pressure to
Act on Terrorism,” January 18, 2002, and John Roberts, “The U.S. Exploits
‘Terrorist Threats’ to Step Up Pressure on Indonesia,” World Socialist
Website, October 2, 2002.
58. High voter turnout in Indonesia is relative. During Suharto’s rule, more
than 90% of voters showed up for elections. However, it is hard to see this
number as a true indication of people wanting to express their political
preferences. Turnout in the 2004 elections started out at around 80% in the
spring and fell to around 70% by the September 2004 run off.
Conclusion
1. This statement is not meant to minimize the significant changes and
improvements that have been realized, particularly in Indonesia.
2. As mentioned in the introduction, democratization and the consolidation of
democracy are ongoing processes. I do not believe that there will come one
particular moment in time when one can say that the process of political
reform is complete and finished.
3. Examples of such policies include drastic reductions in government spend-
ing, reductions in subsidies, tighter banking regulations and oversight, and
tighter monetary policy.
4. It should be noted that people in Thailand have largely chosen to ignore
Thaksin’s lying about his assets and have instead decided to see him as the
Notes ● 163
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